Buy Zimbabwe applauds re-introduction of duty on basics

THE reintroduction of import duty on several basic commodities has vast potential to stimulate the local economy, foster employment growth and level the playing field for domestic products in comparison to their foreign counterparts, Buy Zimbabwe has said.

As of February 1, duty is now payable on imports of a small range of essential goods, most of which are also produced or at least packed in Zimbabwe following the repeal of emergency measures taken in May last year to allow duty-free imports when shortages and price manipulations were accelerating price rises.

The products that have been allowed in duty-free for the last 10 months, and on which duty has now been re-introduced include cooking oil, maize meal, milk, sugar, rice, flour, salt, bath soap, washing soap, washing powder, toothpaste and petroleum jelly.

The repeal of the duty-free status was gazetted by the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube in Customs and Excise (Suspension) (Amendment) Regulations, 2024 (No. 272).

In a statement commending the move, Buy Zimbabwe general manager, Mr Alois Burutsa said there is potential to incentivise consumers towards choosing locally-made products, thereby bolstering the domestic economy and fostering job growth.

“Buy Zimbabwe welcomes the government’s recent decision to reinstate import duties on basic commodities as a progressive development that will contribute to a fairer competitive landscape for domestically produced goods,” said Mr Burutsa.

Mr Alois Burutsa

“The development will help increase capacity utilisation and deepen economies of scale, translating to lower prices on the domestic market. The reintroduction of import duties serves not only to stimulate the local economy but also levels the playing field for domestic products in comparison to their foreign counterparts.”

Mr Burutsa said numerous foreign products that were finding their way duty free into the local wholesale and retail outlets benefit from rebates or subsidies in their home countries, providing them with an unfair advantage over locally manufactured goods.

“Furthermore we note that the absence of competitive pricing for local products has resulted in diminished sales and profitability for domestic companies. There are instances where local producers have been compelled to reduce prices to sub-economic levels to compete with imported goods, adversely affecting their financial performance,” he added.

Mr Burutsa added that Buy Zimbabwe is aware that the prevailing price differential between local and foreign products has precipitated a substantial loss of foreign currency as consumers increasingly turn to imported alternatives.

He said if the local industry is supported by the government through policies that promote local content, Zimbabwean companies will not only provide products which are cheaper and competitive, but can also satisfy local market demand and the export market.

Since 2011 Buy Zimbabwe has been spearheading a campaign to promote local procurement and consumption of locally produced goods.

The government has in the past said the Buy Zimbabwe campaign to buy local products was at the centre of the national development matrix of achieving Vision 2030.

Meanwhile, the Consumer Council of Zimbabwe Matabeleland regional manager, Mr Comfort Muchekeza said the new measures will have an impact on the well-being of consumers.

He said the move protects the local industry from imports that have flooded the local market in the process reducing capacity utilisation.

However, he noted that prices of basic commodities are likely to go up further eroding consumers’ purchasing power.

“There is a need for policymakers to ascertain through consultations if local industry can fill the gap to avoid unforeseen shortages that might emanate.

“We encourage continuous dialogue between stakeholders to find lasting solutions to avert negative effects that might impact business and consumers” said Mr Muchekeza.-chronicle