CZI gives thumbs up to import restrictions

The Confederation of Zimbabwe Industries says the decision by Government to restrict imports of certain products that can be manufactured locally was critical to halt continued decay of local industry.

Already, CZI said apart from contributing to deindustrialisation in Zimbabwe, imports had drained a whopping $36 billion from the economy, going by the country's average annual import bill of 6 billion.Stiff competition to local products from low priced imports, due to high cost of domestic manufacturing, has resulted in local firms failing to compete with foreign products, suppressing capacity utilisation.

"Manufacturing sector's capacity utilisation, which stands at 34 percent (as at 2015) clearly shows that country has idle capacity of over 60 percent, which can be used for import substitution," CZI said.

But in order to give local firms the latitude to recapitalise, retool and increase capacity utilisation, Government introduced measures compelling traders intending to import to first obtain an import licence.

To that end, statutory instrument 64 of 2016 removed several basic products, including food and non-food items from the open general import licence, limiting imports to products not readily available locally.

"CZI believes that the measures taken by Government will go a long way in stemming de-industrialisation, creating jobs, building industry capacity for exports and reducing cost of production to competitive levels on the back of improved economies of scale," CZI said.

Some of the imports removed from the open general import licence include bottled water, mayonnaise, salad cream, peanut butter, jams, maheu, canned fruits, vegetables, pizza, yoghurts, flavored milks, ice creams, culture milks, cheese, coffee creamers and petroleum jellies.

The legislation also controls importation of second hand tyres, urea and ammonium nitrate fertilizers, tile adhesives and tylon, shoe polish, synthetic hair products builder ware such as wheelbarrows, roofing frameworks, pillars, columns, balustrades, shutters, towers, masts and a range roofing frameworks and materials among other products.

CZI said it applauds the measures taken by Government, in response to recommendation by industry in terms of what needs to be done to improve ease of doing business and claw back on trade deficit.

The industrial lobby group said industry has been making strides towards retooling in the difficult environment and that there has been need to acknowledge and support the efforts for revival, resuscitation and development of the domestic manufacturing industry.

The industrial lobby group said it acknowledges that Zimbabwe cannot manufacture everything locally and that where goods can be made locally or where capacity exists, imports should be allowed. CZI said that the SI is not a ban, but merely control measures.

Against this background, CZI has called for measures to prevent corruption and smuggling at the border posts to make SI 64 effective.

The industrial body said it recognises the role traders played prior to 2009, adding they can continue this role, but only covering areas where there is no local capacity and seeking new markets for local products.

CZI contends that given the nature of Zimbabwe industrial problems, focus should now shift from controlling imports of finished goods to importation of raw materials local manufacturers need.

The lobby group said that imported products have worked to the good of local manufacturers in such areas as oil and milk processing.