Zim losing $2,5bn annually to smuggling

Source: Zim losing $2,5bn annually to smuggling – DailyNews Live

Farayi Machamire     1 November 2017

HARARE – The fiscus is losing $2, 5 billion annually to smuggling of
goods, the Zimbabwe National Chamber of Commerce (ZNCC) has said.

In an analysis of Zimbabwe’s thriving informal sector, which is apparently
riding on the back of porous ports of entry, ZNCC said the country’s
comparatively high taxes and the prevailing foreign currency shortages
have made the illegal importation of goods more lucrative.

This comes as government has imposed protectionist policies such as the
Statutory Instrument 64 in a bid to protect the uncompetitive local
industry, but the measure has fuelled smuggling.

Rampant corruption has also aided the illegal importation of the goods.

“Smuggling costs the country not less than $2,5 billion per year,” said
ZNCC chief executive Chris Mugaga in a presentation at the Buy Zimbabwe
retailers and suppliers’ conference last Friday.

“In coming up with the $2,5 billion, we looked at a number of variables
that include the ease of doing business, trade across boarders as well as
the rate of unemployment versus the country’s GDP,” he said.

“You will realise that Zimbabwe’s import bill declined by more than $1
billion not because we are importing less.

“The very products that S1 64 and other protectionist measures sought to
remove are still very much on the market.

“It points to goods no longer coming through the formal channel.

“This channel is the informal sector driven by unemployment.

“According to official figures we have an unemployment rate of around 11

Persistent foreign currency shortages which are forcing retailers to get
the elusive United States dollar from the black market at high premiums,
was also fuelling smuggling.

Only last week, illegal imports of alcohol worth 20 million Namibian
dollars were seized by Namibian customs officials at Walvis Bay and
subsequently destroyed.

According to a Namibian newspaper, intel communicated through a global
customs network resulted in the discovery of the counterfeit consignment,
which was on its way to Zimbabwe.

The consignment was allegedly shipped from the United States via Dubai to
the port of Walvis Bay.

Namibia was meant to be the transit point.

A lawyer representing multinational beverages giant Diageo, which is the
trademark holder of Johnny Walker and Smirnoff in South Africa, Paul
Ramara, said legal action will be taken against the “counterfeiter” in
Zimbabwe, as well as the South African clearing agent at Walvis Bay.