Source: ‘Incentives alone will not boost exports’ – NewsDay Zimbabwe June 14, 2016
THE country’s trade development and promotion body, ZimTrade, has called for an overhaul of the import and export regimes and reducing the cost of doing business, as incentives alone will not boost exports.
BY TATIRA ZWINOIRA
Last month, the Reserve Bank of Zimbabwe introduced a 5% export incentive to boost exports under a $200 million facility from the African Export-Import Bank.
In emailed responses to NewsDay yesterday, Zimtrade chief executive officer, Sithembile Pilime said although the 5% incentive was welcome, the government needed to work on improving the business environment in the country. She said by providing an incentive in direct proportion to what is exported, the policy assisted in creating the best opportunity for exports to grow.
“While we acknowledge this commendable move by the central bank, it is important to note that, at this juncture, incentives alone cannot increase Zimbabwe’s low export earnings. This particular incentive will need to be complemented by an overhaul of the current import and export regimes. The government and all stakeholders need to continuously work on improving the business environment,” Pilime said.
“This includes reducing the cost of doing export business and enhancing operational efficiency of producers. Delays and long lead times in transacting add to the cost of doing business and even to the loss of export markets. We need consistency in policies, interpretation of those policies and a common pronouncement of them.”
Pilime said Zimbabwe’s exporters continue to face a myriad of challenges, which have not only affected their business operations but also the competitiveness of their products on the export market.
She called for the streamlining of the number of export documentation and offering them for free akin to practices of regional countries, the creation of a one-stop-shop for the processing of export and import documentation.
Pilime said there was need to ensure the effectiveness of the one-stop-border to allow faster clearance of goods, subsidising export-related expenditure by companies especially SMEs, facilitating affordable finance for retooling and working capital rehabilitation.
She said there was need to reduce utility charges for manufacturers to allow them to be able to export better.
The 5% incentive for exporters will have to compete against a widening trade deficit of $323 million recorded in the first quarter of the year.
Pilime said Zimbabwe has a great potential to grow its exports, particularly through value addition and beneficiation of its natural resources.
Zimbabwe has been failing to grow the export base due to obsolete equipment and costs of utilities that have made local products uncompetitive.