Zimbabwe forced to scrap ban on imports

STATUTORY Instrument 64 that was promulgated last year will now be scrapped as it has achieved its objectives and targets of boosting industrial capacity utilisation, stimulating retooling and investment into new technologies in industries, a Cabinet Minister has said.

The Statutory Instrument also ran into some challenges that can only be addressed through setting it aside, Industry and Commerce Minister Mike Bimha said yesterday.

SI 64 restricted the importation of certain goods that were being produced locally, as a way of re-focusing attention on increasing production in local industries and helping create employment.

Minister Bimha said the Government would now move away from enforcing SI 64 and come up with other means to ensure industries continued to gain from the achievements it brought.

He said the strategy would now be to adopt "smart" measures like promotion of local content policy to ward off some of the challenges that were encountered during the implementation of SI 64 since July last year.

Minister Bimha said this during a workshop attended by heads of parastatals, State entities, legislators, captains of industry and other stakeholders aimed at reviewing the impact of the Government's economic blueprint, Zim-Asset.

He said while SI 64 was a huge success, some of the challenges the country encountered were retaliatory measures by some trading partners in neighbouring countries.

"To address the challenge of the threat of retaliation from our trading partners, Government will replace the import management programme with a local content policy," said Minister Bimha.

"The policy is anchored on prescribing sectoral local content thresholds for goods purchased by Government departments, industrialists and retailers, among others.

"Local content policy will be applied and this will be considered as a smart protection measure. We would want to move away from the Statutory Instrument. To do this, we need to consult and consult widely so that we come up with a vibrant local content policy to enhance the Buy Zimbabwe concept."

Minister Bimha outlined several achievements that were registered by the import restrictive legal framework, describing SI 64 as a bitter pill to swallow.

"Where I come from, we say mushonga unovava ndiwo unorapa," he said. "If you can gulp that medicine, you know you will be healed. That is what we can say about SI 64."

Some of the achievements of SI 64 included reduction of the import bill, increase in revenue collection, a surge in capacity utilisation of up to 100 percent and new foreign direct investments.

Some of the companies that were exporting products to Zimbabwe ended up setting up plants in the country, thus creating employment.

Challenges experienced during the implementation of SI 64, said Minister Bimha, included balancing the preservation of employment within the retail and distribution outlets that deal in imports and protection of the local manufacturing industries.

Other challenges included delays in payments to foreign suppliers of raw materials owing to foreign exchange challenges and the prevailing liquidity crunch, which was currently depressing general aggregate demand.

"Other challenges are continued appetite for imports by consumers, poor quality and delays in delivery of goods by the local producers due to less competition from imports, incessant smuggling through the porous border posts resulting in increased black market, monopolistic behaviour by some local producers and threat of retaliation from the country's neighbouring trading partners such as South Africa and Zambia," said Minister Bimha.

He said the South African government had understood the Government's move, but confided that some of the pressure against SI 64 was coming from private sector players in that country.

Responding to concerns from the floor, Minister Bimha said Government was working flat out to resuscitate Ziscosteel, but negotiations were sensitive and ought not to be divulged.