SMUGGLERS are making light work of government regulations introduced over the past few years in a bid to reduce imports of goods that can be produced locally, flooding the market with the banned goods.
The canny smugglers are dancing around various statutory instruments, SI64 for a range of over 100 products that included coffee creamers, baked beans, cereals and body creams; SI18 of 2016 (pharmaceutical products); SI19 of 2016 (batteries, floor polish, twine, candles etc); SI20 of 2016 (secondhand clothing and shoes); SI120 of 2014 (plastic packaging, hoses, conveyor belts etc); and SI122 of 2017, which consolidates all products that require import and export licences.
These instruments, especially SI64, have been largely credited with helping increase manufacturing capacity utilisation.
But, as the foreign currency crunch deepens, indications are that the importation of the restricted goods is surging.
While the Confederation of Zimbabwe Industries (CZI)’s latest Manufacturing Sector Survey says the sector has generally responded positively to the import restrictions, it points out that the cost of production and raw material shortages continue to seriously affect capacity.
“Another factor, closely related to raw material constraints, is the current foreign exchange shortage, which is affecting raw material availability,” says the CZI survey.
Last month edible oil producers said they were only getting 30 percent of their foreign currency requirements from official allocations, a situation that has largely resulted in the prevailing inadequate supply of cooking oil.
Representing seven major producers controlling 95 percent of the market, the Oil Expressers Association of Zimbabwe said foreign currency allocations to its members had dropped from 44 percent of requirements in the first seven months of the year, to just under a third of total needs currently.