Opinion / Columnist
Promote local products for economic revival
02 Jun 2016 at 13:31hrs | Views
"An economy that continually imports and fail to export will die". This statement proffered by a Zimbabwean economist Kipson Gundani, is all but too true. The current Zimbabwe economic malaise can be attributable to this disproportion among other things. As early as 2005, the former Reserve Bank governor Gideon Gono decried the adverse impact imports were having on the country and came up with a conceptual framework on the "Buy Zimbabwe Campaign" with the aim of creating "a platform for economic turnaround based on the realignment of consumption patterns with the economy's productive capacities". This was after the realisation that "contemporary evidence shows that no meaningful industrialisation strategy can occur without promoting local products".
Some 10 years later after the mooting of this noble idea by the central bank and the subsequent launch of the "Buy Zimbabwe campaign" in 2011, we are still going around in circles resultantly with the trade deficit continuing to widen with recent 2015 statistics standing at $3 billion dollars where trade figures showed that exports amounted to $2,5bn against $5,5bn imports. We cannot continue with business as usual mentality as the country's over-reliance on imports has been identified as one of the contributors of the current liquidity crunch. Industrialists and economists have always advised that we need to keep money inside the country by all means possible to avert the liquidity crisis and massive company closures in the absence of Foreign Direct Investment to boost industry. In Shona we have a saying "wakarumwa nechekuchera" a situation which aptly describe our situation. We cannot relax as a heavily importing country and expect a change in our fortunes.
Government is doing all in its power to address the anomaly among other things the proposed domestic procurement index which will require retailers to cut imports and increase local product purchases. This in itself is not enough but it's a start. Zimbabwe have been hailed for coming up with excellent policies which have failed on implementation. Maybe we need to really examine our modus operandi as a country if we are ever going to move forward. This is after the Minister of Industry and Commerce, Mike Bimha said "I do not think we are doing enough as Government. A lot of directives and policy measures have been put in place, but for various reasons, this has not been followed through". The minister's honest is recommended but the fact still remains something got to give. We could start with the proposed procurement legislation which the minister even admitted does not exist, "Right now, we do not have a single and strong legislation for local procurement, though we have reference in some pieces of legislation to address this issue." The need for legislation can never been over-emphasised. South Africa who have managed to promote their local products by their "Proudly South African campaign" which have a 75 percent local procurement accord which explains their success. The United States of America enacted the Buy America Act of 1933 to certify that the government preferred procurement of local products. We have both regional and global example of success were the governments took the initiative to promote local products, a move which has seen these countries change their economic fortunes. For example in 1997 Thailand was faced with an economic crisis which encouraged the government to introduce the Buy Thailand campaign as part of a seven-step program to assist in curbing unemployment and boost the local economy.
Reports also show that government is doing everything possible to revive the economy amongst them efforts to resuscitate industry which includes Cotton Pricing Model, Cotton to Clothing Value Chain, Industrial Development Fund, Leather and Leather Product Strategy, and National Competitiveness Bill among others. Of major concern like what the minister said we don't follow through on matters. Right now we are talking of how the clothing industry has died because of "mabhero" or second hand clothes, the government banned these as of September 1, 2015, but nothing has been done to effectively deal with the problem. The second hand clothes market is still thriving with impunity. As much as we have sympathy with those whose livelihoods depend on "mabhero", the effects this has had on the economy is inestimable. Is it not time to bite the bullet and enforce the ban if we have any hope of reviving our clothing industry.
Commendation should be given to the Buy Zimbabwe which was launched in 2011 with the sole objective of raising awareness and the profile of home-grown goods and services. It also seeks to lobby Government to enact laws and policies that support local producers and connecting local producers to retailers, consumers and other relevant stakeholders. Buy Zimbabwe efforts through its annual Buy Zimbabwe Awards should be applauded. The Buy Zimbabwe Awards honours outstanding local companies and individuals that have demonstrated resilience and commitment in job creation and reducing the import bill. Resources should be availed to Buy Zimbabwe as their efforts so far has assisted in government in promoting local products.
It is very saddening to note that some Zimbabweans continue to import non-essentials or finished products whilst shunning local products which to writer's personal opinion are below standards in comparison to Zimbabwean products. The benefits that can be accrued to consuming Zimbabwean products are immeasurable. Any laws that promote locally produced products will increase industrial capacity utilisation which in 2015 had dropped to 34,3% from 36,5% in 2014. One of the reasons identified was low local demand, an anomaly that can addressed by introducing the procurement accord and ensuring it is adhered to. The high demand for local products, will also translate in high employment levels as consumption of locally produced commodities creates demand for local labour resources and immensely contribute towards the reduction of the unemployment rate which currently stand at astronomically levels. Many have heard how Zimbabweans bemoan of "zhing-zhong" a term used to refer to low quality products which have flooded our markets over the years. Locally produced products which are certified by Standards Association of Zimbabwe (SAZ) will never short-change consumers on quality as had been done by some of the imports in the country.
As the country leans to towards local products, it is also pertinent that government and the financial sector continue to resuscitate ailing companies through the Distressed and Marginalised Areas Fund (Dimaf). Dimaf was launched in 2011 as a $40 million fund to re-capacitate ailing companies in the country's second largest city Bulawayo and other cities. As at March 2016, a sum of $29,5 million is alleged to have been disbursed from the fund benefiting approximately 51 companies. Recently, Turnall Holdings secured a $1million from Dimaf to improve its working capital levels. This is the kind of news we yearn for as a nation and not to hear companies folding and workers losing their livelihoods.
As much as Zimbabwe's economy is driven by market forces, some of our challenges have been linked to "too open economy". We need to protect our own and the only way we can achieve that is to reduce the import bill and increase our exports. This is achievable if we protect our industries and consume our products. Local is lekker.
Some 10 years later after the mooting of this noble idea by the central bank and the subsequent launch of the "Buy Zimbabwe campaign" in 2011, we are still going around in circles resultantly with the trade deficit continuing to widen with recent 2015 statistics standing at $3 billion dollars where trade figures showed that exports amounted to $2,5bn against $5,5bn imports. We cannot continue with business as usual mentality as the country's over-reliance on imports has been identified as one of the contributors of the current liquidity crunch. Industrialists and economists have always advised that we need to keep money inside the country by all means possible to avert the liquidity crisis and massive company closures in the absence of Foreign Direct Investment to boost industry. In Shona we have a saying "wakarumwa nechekuchera" a situation which aptly describe our situation. We cannot relax as a heavily importing country and expect a change in our fortunes.
Government is doing all in its power to address the anomaly among other things the proposed domestic procurement index which will require retailers to cut imports and increase local product purchases. This in itself is not enough but it's a start. Zimbabwe have been hailed for coming up with excellent policies which have failed on implementation. Maybe we need to really examine our modus operandi as a country if we are ever going to move forward. This is after the Minister of Industry and Commerce, Mike Bimha said "I do not think we are doing enough as Government. A lot of directives and policy measures have been put in place, but for various reasons, this has not been followed through". The minister's honest is recommended but the fact still remains something got to give. We could start with the proposed procurement legislation which the minister even admitted does not exist, "Right now, we do not have a single and strong legislation for local procurement, though we have reference in some pieces of legislation to address this issue." The need for legislation can never been over-emphasised. South Africa who have managed to promote their local products by their "Proudly South African campaign" which have a 75 percent local procurement accord which explains their success. The United States of America enacted the Buy America Act of 1933 to certify that the government preferred procurement of local products. We have both regional and global example of success were the governments took the initiative to promote local products, a move which has seen these countries change their economic fortunes. For example in 1997 Thailand was faced with an economic crisis which encouraged the government to introduce the Buy Thailand campaign as part of a seven-step program to assist in curbing unemployment and boost the local economy.
Reports also show that government is doing everything possible to revive the economy amongst them efforts to resuscitate industry which includes Cotton Pricing Model, Cotton to Clothing Value Chain, Industrial Development Fund, Leather and Leather Product Strategy, and National Competitiveness Bill among others. Of major concern like what the minister said we don't follow through on matters. Right now we are talking of how the clothing industry has died because of "mabhero" or second hand clothes, the government banned these as of September 1, 2015, but nothing has been done to effectively deal with the problem. The second hand clothes market is still thriving with impunity. As much as we have sympathy with those whose livelihoods depend on "mabhero", the effects this has had on the economy is inestimable. Is it not time to bite the bullet and enforce the ban if we have any hope of reviving our clothing industry.
It is very saddening to note that some Zimbabweans continue to import non-essentials or finished products whilst shunning local products which to writer's personal opinion are below standards in comparison to Zimbabwean products. The benefits that can be accrued to consuming Zimbabwean products are immeasurable. Any laws that promote locally produced products will increase industrial capacity utilisation which in 2015 had dropped to 34,3% from 36,5% in 2014. One of the reasons identified was low local demand, an anomaly that can addressed by introducing the procurement accord and ensuring it is adhered to. The high demand for local products, will also translate in high employment levels as consumption of locally produced commodities creates demand for local labour resources and immensely contribute towards the reduction of the unemployment rate which currently stand at astronomically levels. Many have heard how Zimbabweans bemoan of "zhing-zhong" a term used to refer to low quality products which have flooded our markets over the years. Locally produced products which are certified by Standards Association of Zimbabwe (SAZ) will never short-change consumers on quality as had been done by some of the imports in the country.
As the country leans to towards local products, it is also pertinent that government and the financial sector continue to resuscitate ailing companies through the Distressed and Marginalised Areas Fund (Dimaf). Dimaf was launched in 2011 as a $40 million fund to re-capacitate ailing companies in the country's second largest city Bulawayo and other cities. As at March 2016, a sum of $29,5 million is alleged to have been disbursed from the fund benefiting approximately 51 companies. Recently, Turnall Holdings secured a $1million from Dimaf to improve its working capital levels. This is the kind of news we yearn for as a nation and not to hear companies folding and workers losing their livelihoods.
As much as Zimbabwe's economy is driven by market forces, some of our challenges have been linked to "too open economy". We need to protect our own and the only way we can achieve that is to reduce the import bill and increase our exports. This is achievable if we protect our industries and consume our products. Local is lekker.
Source - Susan Chipanga
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