Firms embrace zero rated customs duty

MANUFACTURING firms are taking full advantage of the zero-rated customs duty on capital equipment to embark on technology upgrade of factories, a development that is feeding to increased capacity utilisation, a Cabinet Minister has noted.

Based on the Confederation of Zimbabwe Industries (CZI) 2022 manufacturing sector survey report, 47,3 percent of surveyed entities indicated technology upgrade and 49,8 percent maintained their technology status.

Only three percent noted a downgrade.

The survey covered all firm sizes, with about 65 percent being small entities, 16 percent medium businesses, while 15 percent were large firms.

Industry and Commerce Minister, Dr Sekai Nzenza attributed the upgrade to conducive policies rolled out by the Government.

“I am also delighted to note that the technology upgrade by local firms was very high in 2022. I believe that the recent introduction of SI 121 of 2022 which zero-rated customs duty on capital equipment is now bearing tangible results.

“The customs duty has been revised downwards to almost zero percent thus giving a cost advantage to firms in bringing in capital equipment,” she said at the launch of the survey last week.

According to the report, the chemical and petroleum products sector had the highest upgrade of 62 percent, non-metallic minerals products (57 percent), paper, printing and publicising sectors had 50 percent.

President Mnangagwa

The annual survey provides a detailed insight into the performance of the manufacturing industry.

Through the industrialisation agenda, the Second Republic led by President Mnangagwa believes industry should play a leading role in the country’s quest to have an empowered upper middle-income society by 2030.

The survey results show that large-scale firms recorded the highest capacity at 63 percent, a rise from 62,7 percent in 2021.

The minister noted that in addition, companies have managed to either expand their existing plants, while new enterprises came aboard, and this has been attributed to the ongoing engagement and re-engagements efforts with the external world, Belarus, Turkey, and Indonesia among others.

“Such engagements are being strengthened locally through local trade fairs. We have the 63 Edition of the ZITF in few weeks to come in Bulawayo.

“Therefore, I strongly urge you to participate and establish business linkages with both the local and foreign partners.”

In addition, a total of US$22,5 million Special Drawing Rights Fund for Retooling and Development of Value Chains, has been availed targeting the pharmaceuticals, cotton, leather, agro-processing and fertiliser.

People’s Own Savings Bank (POSB)

Dr Nzenza urged firms in the targeted sectors to apply for the funds through the designated implementing banks such as Ecobank, People’s Own Savings Bank (POSB), BanABC and FBC.-chronicle