Business / Economy
Import restrictions could last up to 3 years, Zimbabwe tells SA
06 Aug 2016 at 08:32hrs | Views
ZIMBABWE has told South Africa that import controls introduced in June this year through Statutory Instrument 64 of 2016 will last between two and three years.
The Statutory Instrument removed 42 products from the open general import licence, restricting their importation into Zimbabwe, as it was felt that local industry has capacity to produce them.
The legislation controls a wide array of imports, among them coffee creamers, camphor creams, white petroleum jellies, body lotions, builders' ware such as wheelbarrows, structures and parts of structures of iron or steel, bridges and bridge sections, lock gates, lattice masts, roof, roof frameworks and doors.
As such, during the latest chapter of bilateral trade and economic cooperation meetings with South Africa, Industry and Commerce Minister Mike Bimha apprised his South African counterpart, Rob Davies, on the background to the present state of industry and circumstances leading to the restrictions.
While Government will control the importation of products, where it has been proven goods can be produced locally, it will also mobilise funding to support the recovery of areas protected through SI 64 measures.
"These measures are time bound. They are not there forever. Two to three years is what we are looking at," Minister Bimha said. He said a monitoring and evaluation committee has been put in place to assess the impact of the measures.
Among key trade issues discussed during last Thursday's meeting in South Africa were import control measures Zimbabwe introduced through SI 64 and the requirement by South Africa for pharmaceutical imports to enter the country by air.
Addressing journalists in Harare on Friday, in the presence of Information, Media and Broadcasting Services Minister Chris Mushohwe, Minister Bimha said Pretoria welcomed his submission on the justification for import controls while Harare would look into South Africa's request for duty or tax phase down on certain products or outright removal.
"These measures were well received by our counterparts. South Africa (trade minister) emphasised that they cherish the good relations between our two countries and acknowledged the role trade plays in the economies of our countries," he said.
SA, in terms of outstanding trade and economic issues with its northern trade partner, requested that Zimbabwe considers phasing down duties and taxes on certain products and submitted a priority list of 112 products.
"We asked them if they could present a priority list (in terms of) which, they want us to reduce or remove duties and certain taxes. We agreed that we will come back to them in two weeks with a full response on the 112 products," Minister Bimha said.
The time, he said, is meant to allow for widespread consultations. In terms of the requirement for pharmaceutical products to be airlifted and enter through OR Tambo International Airport, Minister Bimha said he was advised by his counterpart that this was not a trade issue, but a health issue.
As such he said they agreed that the matter will be discussed between the health ministers of the two countries who will make their recommendations on the best way to proceed.
He, however, refuted media reports, after his meeting with his trade counterpart, that South Africa had given Zimbabwe a two-week ultimatum to rescind its decision on imports or risk severe retaliatory measures from its biggest trade partner.
"There has never been any communication prior to or during our meeting (with Minister Davies) that there is going to be retaliatory action from South Africa (over import controls)," he said. "I would be surprised if South Africa looked at retaliation."
Minister Bimha said he had explained how Zimbabwe's industrial base was decimated by the decade long economic instability; how it weathered the storm during that period and negative impact its huge import bill has had on local industry.
"I gave them details of how our manufacturing sector is performing in terms of capacity utilization and the factors affecting that performance. I told them that among the factors, was the issue imports, which has affected the performance of our manufacturing sector and that it is not just the imports from South Africa, but the rest of Africa and Asia.
The Confederation of Zimbabwe Industries 2015 manufacturing sector survey report says industrial capacity is at 34 percent. "I also demonstrated to them the effect of the removal of certain products from the open general import licence in 2014, which improved the capacity of (some) companies and that some companies from South Africa have come to invest in Zimbabwe as a result of these measures," the minister said.
Minister Bimha said he told Minister Davies that Zimbabwe's import bill averaged $6 billion while exports were $3 billion annually, a situation the minister said was not sustainable and was partly the reason the country is facing liquidity and cash crises.
"A senior official from the Reserve Bank (part of the delegation to SA) presented on the issue of liquidity, as well as the challenge that we have experienced in terms of cash shortages." Minister Bimha said import restrictions through SI 64 were not tantamount to a ban, but were alternatives available to every country in terms of the World Trade Organisation and Sadc trade rules and protocol.
"Much of the problems can be attributed to the surge in imports. The imports are not critical to Zimbabwe because we now produce some of the products we are importing," he said. Zimbabwe will continue to import critical raw materials, capital goods and items that are not readily available in the country while giving its industry time and space to retool and acquire latest technologies to be able to compete globally.
The country also has import exemptions for returning residents, diplomats, goods associated with inheritance and for products meant for consumption by individuals or their families. Zimbabwe is in the process of preparing a comprehensive explanation about the justification for introducing the import restrictions, which will be submitted to the Sadc secretariat soon.
Minister Bimha said Zimbabwe honours obligations it has signed up to together with its regional counterparts, which explains its role in championing the industrialisation strategy for Sadc.
The Statutory Instrument removed 42 products from the open general import licence, restricting their importation into Zimbabwe, as it was felt that local industry has capacity to produce them.
The legislation controls a wide array of imports, among them coffee creamers, camphor creams, white petroleum jellies, body lotions, builders' ware such as wheelbarrows, structures and parts of structures of iron or steel, bridges and bridge sections, lock gates, lattice masts, roof, roof frameworks and doors.
As such, during the latest chapter of bilateral trade and economic cooperation meetings with South Africa, Industry and Commerce Minister Mike Bimha apprised his South African counterpart, Rob Davies, on the background to the present state of industry and circumstances leading to the restrictions.
While Government will control the importation of products, where it has been proven goods can be produced locally, it will also mobilise funding to support the recovery of areas protected through SI 64 measures.
"These measures are time bound. They are not there forever. Two to three years is what we are looking at," Minister Bimha said. He said a monitoring and evaluation committee has been put in place to assess the impact of the measures.
Among key trade issues discussed during last Thursday's meeting in South Africa were import control measures Zimbabwe introduced through SI 64 and the requirement by South Africa for pharmaceutical imports to enter the country by air.
Addressing journalists in Harare on Friday, in the presence of Information, Media and Broadcasting Services Minister Chris Mushohwe, Minister Bimha said Pretoria welcomed his submission on the justification for import controls while Harare would look into South Africa's request for duty or tax phase down on certain products or outright removal.
"These measures were well received by our counterparts. South Africa (trade minister) emphasised that they cherish the good relations between our two countries and acknowledged the role trade plays in the economies of our countries," he said.
SA, in terms of outstanding trade and economic issues with its northern trade partner, requested that Zimbabwe considers phasing down duties and taxes on certain products and submitted a priority list of 112 products.
"We asked them if they could present a priority list (in terms of) which, they want us to reduce or remove duties and certain taxes. We agreed that we will come back to them in two weeks with a full response on the 112 products," Minister Bimha said.
The time, he said, is meant to allow for widespread consultations. In terms of the requirement for pharmaceutical products to be airlifted and enter through OR Tambo International Airport, Minister Bimha said he was advised by his counterpart that this was not a trade issue, but a health issue.
As such he said they agreed that the matter will be discussed between the health ministers of the two countries who will make their recommendations on the best way to proceed.
He, however, refuted media reports, after his meeting with his trade counterpart, that South Africa had given Zimbabwe a two-week ultimatum to rescind its decision on imports or risk severe retaliatory measures from its biggest trade partner.
"There has never been any communication prior to or during our meeting (with Minister Davies) that there is going to be retaliatory action from South Africa (over import controls)," he said. "I would be surprised if South Africa looked at retaliation."
Minister Bimha said he had explained how Zimbabwe's industrial base was decimated by the decade long economic instability; how it weathered the storm during that period and negative impact its huge import bill has had on local industry.
"I gave them details of how our manufacturing sector is performing in terms of capacity utilization and the factors affecting that performance. I told them that among the factors, was the issue imports, which has affected the performance of our manufacturing sector and that it is not just the imports from South Africa, but the rest of Africa and Asia.
The Confederation of Zimbabwe Industries 2015 manufacturing sector survey report says industrial capacity is at 34 percent. "I also demonstrated to them the effect of the removal of certain products from the open general import licence in 2014, which improved the capacity of (some) companies and that some companies from South Africa have come to invest in Zimbabwe as a result of these measures," the minister said.
Minister Bimha said he told Minister Davies that Zimbabwe's import bill averaged $6 billion while exports were $3 billion annually, a situation the minister said was not sustainable and was partly the reason the country is facing liquidity and cash crises.
"A senior official from the Reserve Bank (part of the delegation to SA) presented on the issue of liquidity, as well as the challenge that we have experienced in terms of cash shortages." Minister Bimha said import restrictions through SI 64 were not tantamount to a ban, but were alternatives available to every country in terms of the World Trade Organisation and Sadc trade rules and protocol.
"Much of the problems can be attributed to the surge in imports. The imports are not critical to Zimbabwe because we now produce some of the products we are importing," he said. Zimbabwe will continue to import critical raw materials, capital goods and items that are not readily available in the country while giving its industry time and space to retool and acquire latest technologies to be able to compete globally.
The country also has import exemptions for returning residents, diplomats, goods associated with inheritance and for products meant for consumption by individuals or their families. Zimbabwe is in the process of preparing a comprehensive explanation about the justification for introducing the import restrictions, which will be submitted to the Sadc secretariat soon.
Minister Bimha said Zimbabwe honours obligations it has signed up to together with its regional counterparts, which explains its role in championing the industrialisation strategy for Sadc.
Source - Herald
