Zim bows to SA pressure over SI 64

Source: Zim bows to SA pressure over SI 64 – The Standard August 28, 2016

Government has been forced to reduce duty and surtax on some products imported from South Africa in response to concerns raised by that country over the restriction of imports under Statutory Instrument (SI) 64 of 2016.


Early this month, South Africa gave Zimbabwe two weeks to remove duty and surtax on 112 products after Zimbabwe had restricted the importation of 43 products under SI 64.

Sources told Standardbusiness last week that after Industry and Commerce minister Mike Bimha took the matter to Cabinet, a few concessions would be made.

The source said: “government will be falling back on trading protocols from the World Trade Organisation to avoid some of the stipulations in the Sadc Trade Protocol of 1996. South Africa also has restrictions of its own on what Zimbabwe can export to that country.”

Industry and Commerce deputy minister Chiratidzo Mabuwa last week said the government’s response to the request to reduce duty on the 112 products would be revealed at the Sadc regional meeting.

An extraordinary committee of ministers’ meeting was held last week on August 24.

“If the SI 64 of 2016 affected, for example the informal traders, it is government’s duty to come up with alternative means such as looking at (what could be done about) other products that are still permissible to bring in,” Mabuwa said.

“For example, we have the importation of palm oil, olive oil, fridge-free margarine, washing powder, so we can let it go now but as long as firms for these products are established here, we have to create a market for them. We go and do our due diligence, look at what is involved, go into the industries where economists do their work, come up with what the national demand is, and what it is that we can do and how can we produce it.”

SI 64 of 2006 came after a number of imports regulations — SI 6 of 2014, SI 126 of 2014, SI 18 of 2016, SI 19 of 2016 and SI 20 of 2016 — which were introduced to support local industries.

Some of the 43 restricted imports include coffee creamers (Cremora), camphor creams, white petroleum jellies and body creams.

“In 2016 we issued Statutory Instrument’s number 18, 19 and 20 looking specifically at issues but it is just that SI 64 is the fattest because it has 43 items that have been grouped together. If you look at it, we did not issue anything in 2015 which means we had a lot of representations from industry and we came up with these 43 items and it is not going to be the last one. We might come up with more depending on the representations,” Mabuwa said.

Buy Zimbabwe chief executive officer Munyaradzi Hwengwere said South Africa had in the past introduced the preferential trade arrangements on Zimbabwe’s textiles. He said South Africa imposed a 65% duty on textile products, a move which suffocated textile companies in Bulawayo.

Deputy Agriculture minister Paddy Zhanda said companies complaining about the effects of import restrictions should be “ignored”.

He said trading was not really free and was actually a “war” suggesting that Zimbabwe deals with the costs of the potential effects. However, Mabuwa disagreed saying there was need to honour trading agreements.

Zimbabwe National Chamber of Commerce president Davison Norupiri said although some companies had been affected, others had seen increases well above 30% capacity utilisation and increased productivity.

“We have got companies that have registered growth in terms of capacity utilisation [and] employment [creation] which is something we cherish as a chamber. The government also whet the appetite of those who want to invest in our country. We have also witnessed massive expansion on most of the oil companies in this country,” Norupiri said.
Zimbabwe is South Africa’s fifth biggest export market in Africa.  In 2015, Zimbabwe imported goods and services worth $1,8 billion from South Africa, according to statistics from South Africa’s Department of Trade and Industry.

South African firms like trading with Zimbabwe due to the strong currency the country uses at a time when the South African rand has been volatile.