Mnangagwa warns against shutting out competitors

Vice President Emmerson Mnangagwa says import restrictions are no longer suitable and sustainable in the global market and could cut out the country, a position which is at variance with his subordinates in government and some industrial players pushing for stringent imports restrictions.

Officially, opening the Sixth Annual Buy Local Summit on Thursday night Mnangagwa said restrictions were not sustainable and would soon be lifted under pressure from trading partners.

His comments come as local manufacturers are stampeding for a total shut down on imports following the promulgation of statutory instrument 64 of 2016 which removed a number of groceries and building materials from the Open General Import Licence.

"Industry must appreciate the important role that competition plays in a globalising economy. We risk closing ourselves out of the global market and fail to develop and learn in line with global trends.

"Moreover, we need to appreciate that restrictions are not sustainable, and that in the long term, pressure from trading partners will always force us to open up our markets again," Mnangagwa warned.

He, however, said government was implementing SI 64 of 2016 as a stop gap measure to give relief to local industry.

Mngangagwa said in buying imports the country was strengthening competition against its own industries.

"As we purchase foreign products, we actually aid foreign-based companies to attain critical-volumes that allow them to enjoy ‘economies of scale', and then cut us on prices...As a result of such skewed purchasing decisions, we end up indirectly creating jobs in foreign countries, when our own companies are closing down or filing for bankruptcy, leaving our brothers, sisters, friends, sons and daughters, without jobs."

He said for the country to be competitive again it needed a concrete business model.

"For us to be competitive again, increase capacity utilisation and raise exports, we need to develop some model that looks at major costs and prices in order to come up with a range within which costs and prices may fall, as guided by agreed regional benchmarks," Mnangagwa said.

In a sober analysis the VP said in working towards limiting imports and rolling out the Buy Zimbabwe Campaign, there was need to "protect the consumer in terms of quality, pricing and supply of products, whether they are finished products or are to be used as raw materials."

He said for this to succeed, local industry's capacity needed to improve.

"The country's industrial capacity must significantly improve to guarantee product availability at the right quantity, quality and pricing that meets or exceeds similar imports."

He also said the country needed to have an import substitution strategy which however, would need to have an evaluation mechanism to gauge its benefits.

Mnangagwa said the call to buy locally was not peculiar to the country.

"All countries, at one point or another, have adopted the Buy National concept. Examples include the United States of America's Buy National Act, which requires that Federal, State, and Local Government entities procure only domestically manufactured goods; China, that has mandated that all Global System for Mobile Communications (GSM) components be produced domestically, and South Africa, whose Proudly South African initiative is symbolised by that country's flag," Mnangagwa said.