Source: ‘Industry protection not forever’ | The Herald May 30, 2016
Industry and Commerce Minister, Mike Bimha said Government will not protect the local manufacturing industry from outside competition forever, urging the sector to take advantage of the measures to capacitate themselves.
Government has over the past few years implemented a raft of policy measures including bans on certain imports and duty hikes on other products to reduce flooding of cheap imports as it sought to protect the struggling local industry.
Coming from a background of tough economic times where industry was unable to retool and capacitate itself, flooding of imports was drowning an already suffocating industry.
Minister Bimha admitted that some sections of the manufacturing industry had improved their performance in the past few years, but stressed the Government could only continue to protect industry for a limited time.
“Protection seems to imply permanency but this support is not forever,” he warned captains of industry at a meeting on import management and local industry support measures.
“One thing is certain and that is competition is here to stay and we must be able to fight that competition.”
With output averaging 30 percent of capacity, Zimbabwe’s manufacturing industry has said it requires between $2 and $4 billion to boost output, but sources of cheap finance to retool have remained scarce.
And while the manufacturers struggle to rejuvenate their performance, foreign players have found Zimbabwe, which is using the United States dollar as its anchor currency, a ready market for their produce, presenting problems for local industries.
Minister Bimha said for sectors such as cooking oil manufacturing, the Government had said it would only issue import licenses in cases where there are shortages on the local market.
“We said we will only import if we are satisfied we do not have sufficient products locally,” he said.
Oil Expressers Association representative Sylvester Mangani confirmed that the protective measures had paid off.
“In 2014, before the measures were put in place, we had 85 percent of the shelf space in supermarkets being occupied by imported cooking oil and this is now down to 5 percent,” he said.
Mr Mangani urged the Government to ensure gains achieved in the past two years were not reversed by ensuring that local farmers were capacitated to produce cotton seed and soya beans, which were critical ingredients in the cooking oil production process.
“As a result of cotton seed and soya bean shortages, we have no choice but to import crude oil,” he said. — New Ziana.
COMMENTS
Legal sanctions against the illegal Smith regime let to industrialization. Illegal sanctions against the legal Mugabe regime led to economic collapse. Discuss.
The statement that they won’t be able to protect industry forever is, in fact, good news as it implies that this government will not be here forever. Discuss.
The manufacturing industry has never been protected by the Zanu PF government especially since 2009. Before that there was price control with a runaway inflation. Now we have to compete with reduced or zero duties on imported goods and importation permits given to selected persons. On top of that we have unworkable labour laws, dozens of people arriving at the door demanding money for the various government organisations. Then we have Zimra with their outrageous tax demands. Zanu PF have made local manufacturing industry impossible.
Now you tell us that you aren’t going to protect us forever. As zumbuko has said when the world put sanctions on Ian Smith and the country we industrialised. The world puts sanctions on Zanu PF and we have economic collapse!!
Furthermore, what money are Zanu PF going to import with?
Zimbabweans are resourceful, inventive and hard working. As soon as ZANU PF go Zimbabwe will return to being the bread basket of Africa.