New rules to curb imports

Source: New rules to curb imports | The Sunday Mail May 29, 2016

Enacy Mapakame
Retailers will be required to cut imports and increase local product purchases if Government and business adopt a proposed domestic procurement index.
Both parties are amenable to the proposal that could come into force as early as June 2016.
Zimbabwe has been struggling to cut its trade deficit and in 2014 recorded imports of US$6 billion against exports of US$3 billion.
Petrol and diesel accounted for 25 percent of imports (US$1,5 billion), with machinery and mechanical appliances gobbling US$595 million. Motor vehicles, electrical machinery, cereals, fertilisers, pharmaceuticals, plastics, iron and steel and paper/paperboard also figured in that import basket.
Government has various instruments to curtail imports while stimulating local production, but these have not been fully enforced to revive industry and leverage companies that were on the brink but can now offer the market a healthy supply of products.
Latest Government data shows that Cairns Foods’ capacity utilisation has over the months grown from 15 percent to 80 percent while agro-processor Surface Wilmer and Bulawayo-based United Refineries Limited are at 100 percent and 90 percent respectively.
Industry and Commerce Minister Mike Bimha admitted that authorities had not done much to promote local procurement, but were now working to offset trade imbalances.
“I do not think we are doing enough as Government.
‘‘A lot of directives and policy measures have been put in place, but for various reasons, this has not been followed through.
“Right now, we do not have a single and strong legislation for local procurement, though we have reference in some pieces of legislation to address this issue.”
On State vehicles, Minister Bimha said: “The assumption is that Government has money and, therefore, should procure (vehicles) from local assemblers.
‘‘But then you have a certain funder with conditions that we buy vehicles from a particular source.
“Even consumers need to see the benefit of buying local as we still have people who think goods from other countries are better than those manufactured here in Zimbabwe.”
Confederation of Zimbabwe Industries vice-president Mr Sifelani Jabangwe advocated sector-specific approaches similar to those for the fast-growing dairy and cooking oil sub-sectors.
“What has worked for (the dairy and cooking oil manufacturing sectors) can be extended to other sectors and that could possibly help.
“Ideally, there should be at least 50 percent locally-manufactured products on our shop shelves. In that way, we will have given consumers more options.”
Buy Zimbabwe chief executive Mr Munyaradzi Hwengwere chipped in: “We are working with the ministries of Finance and Economic Development, and Industry and Commerce on a framework for the proposed local content procurement index.
“Sometimes, people do not understand what local is, and all these issues have to be clarified.
‘‘It is our considered view that clear legislation on domestic procurement can also help our industry to become more competitive.”