Buy Zimbabwe calls for duty-free import suspension

THE Buy Zimbabwe initiative has implored the Government to restore duty on some basic commodities to protect local companies from competition from imported products.

In May this year, the Government scrapped import duty on 14 basic commodities for six months in response to unjustified price increases by unscrupulous retailers and to ensure the availability of the products at competitive prices.

The prices linked to the wild exchange rate had led to the erosion of buying power and constrained consumer aggregate demand.

In an interview with The Herald Finance and Business this week, Buy Zimbabwe general manager Mr Alois Burutsa said the Government should reconsider removing the commodities from the Open General Import Licence (OGIL) now that prices of most products have stabilized.

“As Buy Zimbabwe, we are (now) concerned with the products that were put by the Government on the Open General Import Licence (OGIL) in reaction to price increases that happened in the market at that time,” said Mr Burutsa.

“We appreciate what the Government was trying to do; to protect the public from wanton price increases.

“However, we have had stability in the foreign currency market (which was) a key driver of inflation in this country.

“And once our exchange rate stabilises, then it leads to stability in our prices. The prices have actually been coming down, so we would like to implore the Government to reconsider that decision.”

Mr Burutsa said the removal of basic products from the OGIL would impact positively the performance of the local industry and help safeguard jobs as well as enhance the creation of employment.

“We also need to support our local industry to ensure that our locally-produced products are strong and ready against the influx of imported products that are going to be brought about by the African Continental Free Trade Agreement (AfCFTA) to which Zimbabwe is a signatory to,” said Mr Burutsa.

The AfCFTA was operationalised on January 1, 2021, marking historical strides towards continental economic integration.

Zimbabwe has submitted its instrument of ratification, a development expected to pave the way for the country’s full participation in the estimated US$3,4 trillion bloc and the world’s largest single market with a population of 1,3 billion people.

“We need to ensure that by the time companies in Africa come to Zimbabwe, our local industries are on a good footing and are able to defend themselves against imports.

“Therefore, it is our hope that the Government considers that and allows our companies to retool and strengthen their production systems,” he said.

Mr Burutsa said it was also imperative for the country to undertake local content analysis on domestic products to compel businesses to source their raw materials locally in support of the industrialization agenda.

The Ministry of Industry and Commerce is reportedly developing local content thresholds across some economic sectors in accordance with the Zimbabwe National Industrial Development Policy that runs between 2019 and this year.

The development of the thresholds seeks to boost investment, value chain development, value addition, and beneficiation in line with the National Development Strategy 1 (NDS 1).

“As Buy Zimbabwe, our thrust now is to focus on driving the Local Content Strategy or policy.

“The Government launched the Local Content Strategy in 2019 and through the Local Content Policy what we are trying to do is to have our local companies support local value chains.

“We are trying to avoid the situation whereby we say a product is made in Zimbabwe but 80 percent of their raw materials is imported.”

If a product is manufactured in Zimbabwe, he said it should be genuinely made locally right from raw materials to the processing across all value chains. “Therefore, what you are going to see going forward is what is called Local Content Rating.

“Companies will be able to enjoy certain benefits if they have (a good) Local Content Rating,” said Mr Burutsa.

At last year’s Chamber of Mines of Zimbabwe (CoMZ) annual general meeting in Victoria Falls, it was highlighted that of all the mining industry’s total consumables, only 12 percent were being sourced from the domestic market.

Mr Burutsa said such a situation creates challenges as the foreign currency earned from the mining industry is repatriated back to foreign countries.

“The Government is targeting a US$12 billion mining sector and of that US$12 billion we run the risk that the US$12 billion that we are going to realise from mining, most of it goes out again.

“Therefore, what we are saying is that as much as possible we would want a situation where most of that US$12 billion stays in the country and supports local industry that feeds into the mining sector.”-herald