Zimbabwe cement firms face closure

Local cement producers have warned of possible scaling down of operations and closures owing to an influx of cheap imported products from the region, saying protectionist measures could save the industry.

Zimbabwe has become an attractive market for cement as well as other imports as regional currencies depreciate against the United States dollar.

The country adopted the multi-currency system currently dominated by the greenback in 2009 following record hyperinflation.

According to a position paper presented to the ministry of Industry and Commerce by the Cement and Concrete Institute of Zimbabwe, cement manufacturers are lobbying government to ban imported cement, among other interventions, saying the market is currently oversupplied.

Industry players say this could paralyse the domestic industry.

Among some of the measures that industry is pushing for are a protection tariff to equate the landed price of imported cement to the cost of local manufactures (US$50/t cement), granting of import licences to local producers, cancellation or review of all issued permits that are circulating in the country (estimated at 5000 tonnes/month or 5% total demand) and lowering duty on raw materials.

Meanwhile, Barclays Bank Zimbabwe managing director George Guvamatanga says Zimbabweans should go through a paradigm shift and focus more on manufacturing instead of importing products that can be produced in the country.

This would reduce the import bill which reached $6 billion last year and in the process alleviate pressure on cash. Reduced demand for cash would mean that there will not be cash shortage as being experienced currently.

Guvamatanga said that Zimbabweans are importing products that are available locally, putting further strain on liquidity in the country. Zimbabwe is currently facing cash shortages as a result of over reliance on imports compared to fewer exports, a situation that has led to cash shortages.