Smuggling threatens manufacturing sector value-addition chain 

Source: Smuggling threatens manufacturing sector value-addition chain -Newsday Zimbabwe

A dark cloud casts its shadow over Zimbabwe’s manufacturing sector as the scourge of smuggling tightens its grip, jeopardizing not only the survival of local industries but also the job opportunities they create. Particularly hard-hit are textile and blanket manufacturers, once pillars of the nation’s economy. These are now struggling to compete against the influx of illicitly imported goods.

The textile sector, renowned for its history of job creation and skills development, is reeling from the impact of smuggling activities that bypass formal import channels, undercut local prices, and circumvent tax obligations. The once-thriving industry, which used to provide employment to thousands of Zimbabweans, is now facing an uncertain future, with legitimate manufacturers finding it increasingly challenging to sustain operations.”We should cherish our local value-adding manufacturing sector,” remarked a concerned industry insider.”These businesses contribute not just to the economy but also to the social fabric of our society by creating jobs and fostering skills development. However, they are now under siege from unfair competition.”The situation is exacerbated by the perception that current systems and policies inadvertently favour traders over manufacturers, creating an uneven playing field that disadvantage local producers. While authorities scrutinize local industries, foreign traders exploit loopholes, conducting transactions in foreign languages, issuing exclusive US dollar receipts, and evading scrutiny.



In light of this crisis, calls are mounting for the Reserve Bank of Zimbabwe (RBZ) to prioritize allocating foreign exchange to industries that demonstrate a commitment to job creation instead of allowing traders of finished, mostly imported goods, getting the lion’s share of the national cake.Industry players are also lobbying the government to provide fiscal incentives and benefits to local manufacturers to level the playing field and support the growth of the value-adding manufacturing sector.“The current situation where traders are allowed to operate with impunity while local manufacturers struggle begs for urgent policy reforms,” emphasized an industry expert.“We must ensure that our economic policies prioritize the long-term sustainability of local industries and the preservation of job opportunities for Zimbabwean workers.”

As stakeholders rally for decisive action to combat smuggling and safeguard the future of local value-adding manufacturing, the fate of Zimbabwe’s formal sector hangs in the balance. It is a critical juncture for the nation to reaffirm its commitment to supporting home-grown industries and for policymakers to enact measures that foster a conducive environment for their growth and success.