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Govt was right on banning imports - Mangawa

by Stephen Jakes
20 Jul 2016 at 06:25hrs | Views
The  Zanu PF UK Chairperson Nick Mangwana has said the government was right by banning some imports saying though the move was hash is was meant for the good of the local industry and the people of Zimbabwe.
Using the party blog Mangwana said some times governments have to make rough decisions for the interests of the nation.
"In fact, one can argue that populism has been one of the most destructive philosophies of many post- independence African States. So well-meaning and stable governments sometimes do have to sacrifice current popularity by making tough decisions to move a country forward," he said.

"One of the most seemingly unpopular but noble decisions made by the Government of Zimbabwe was to promulgate Statutory Instrument 64 of 2016 (SI 64/2016) which restricted the amount and kind of goods one could import. This was meant to protect local industries from being suffocated by cheap imported products from the region. This did not only affect ordinary folks in Zimbabwe surviving on cross-border trading, it sent shock waves in the region."

Mangwana said domestically there were disturbances in Beit Bridge and murmurs on the streets.

"To make the argument for the government position was the panic in South Africa. They were very clear that jobs are going to be lost. Closer to the border they expect much more than 1000 jobs to be lost. Even in Malawi the government had to discuss the impact of SI/2016 on their export volumes. Malawi started reviewing its export policy to Zimbabwe in light of this," he said. "The whole region is seized with the matter right now. Zimbabweans never realised that they had such buying power to cause such trade turmoil in the region. All things being equal the government can rest its case in as far as the logic behind the ban is concerned."

The UK based politician said not all things are equal and there is massive unemployment in Zimbabwe and a lot relied on selling imports to earn or augment their income.

"The people are saying that they are being stopped from earning an honesty living. What are they supposed to do now? They accuse the government of being heartless and preferring capitalists against to its own people. The government rebuts by saying it is with employment of the people  in mind that it tries to protect their jobs by protecting local industry. This is a classic Catch 22 situation for the government and the people themselves," he said.
"There is no doubt that imports seriously injure industry and the reaction in the region vindicates that. To curtail imports the government had two tools. Either to give subsidies to local industries or restrict imports. The answer to that was a no brainer. Struggling with fiscal space took the subsidy option off the table. This left the import restriction as the only option. It made its choice putting itself in a no-win conundrum. What is it going to do with the people whose livelihoods is affected by SI 64/2016, when it has an impossible unemployment rate as well as a need to reduce the civil service?"
Mangwana said it has to be understood that there is likely to be an all round increase in industrial output as commercial demand for the products from the protected industry increase but the results is not assured.
"There is also the risk that demand towards local products would result in fatcat bosses using the extra cash for higher salaries and allowances instead of increasing employment and improvement in quality of the products themselves. The industries benefitting from this should be monitored because the whole population cannot make sacrifices for fatcats," he said.
"Another angle that would restrict demand of the local product is the Income Factor. With Made in Zimbabwe goods being so expensive and imports not coming in, consumers might just do away with the use of those goods since they just cannot afford them because of low incomes. That would not benefit industry as well. Some unscrupulous traders will also increase their prices because of the restricted competition and make the consumer suffer more whilst doing nothing for employment. So it is incumbent upon industry to also revisit its margins."
He said most executives of these companies live profligate lives and somebody has to pay for that.
"They then escalate the price of their products and the market resist by going to buy next door. Now that they have been protected they should take this opportunity to make their processes more mature so that the anticipated increased revenue from the protected market would not be used for executive largess."
He said Vice President Emmerson Mnangagwa raised the debate of Protectionism versus free trade to a different level by saying that the Import Control measures were temporary.
"He went further to suggest that Free Trade helps to increase the quality and efficiency of local industries as they up their game in order to survive against steep competition from across the borders.  However, during its infancy, the local industry would need to be nursed. Like a child it has to be protected until it gets enough maturity to run and compete on its own. But when it comes to Zimbabwe the question is when will that be? What is the roadmap?" Mangwana said.
"This columnist swears by the Buy Zimbabwe mantra but that should not turn lazy to innovate or lazy to think industrialists into Cry Babies. A few months ago spoiled mobile companies in Zimbabwe were asking the government to ban platforms such as  Whatsapp. Not for facilitating the sending of incendiary or subversive messages. It was for reducing their call time and text revenue. Instead of innovating and come up with products to increase their revenue all they wanted was protection so they could just "chill" and milk it. Their approach made them deserve the Title "Enemies of Progress". So our industries should also not remain babies needing nursing and cuddling forever."
He said this is not a crusade against neoliberalism and it is part of sovereignty that a nation should always protect its citizens above foreigners in a lot of issues.
"But protection of own citizens includes protection of the corporate citizens.  The tendering system is said to favour locals. But there have been reported cases of substandard bitumen emulsion being imported to be used in civil contracts such as road construction when local companies who do that product should be capacitated and this is locally bought," he said.
"Focus should on this cash intensive imports more than on domestic groceries.  Some of the groceries which are bought by individual vendors do not make a big dent on the market even if collectively aggregated. It's just a minor ripple which is just enough to provide someone with a livelihood. But big purchase including furniture, electronic equipment, housing decorations in the in the palaces of the non-duty paying elite should also be looked at for this policy to have any purchase with the people."
Mangwana said the argument is, if Zimbabwe industry booms, then Zimbabweans will move from the informal sector into formal employment.
"They would use hard earned degrees for a  living. Possibly those degrees do not include a Bachelor in Vendor Studies. This formalisation of Zimbabwe's economy will take long. Import restrictions while part of the solution is not a silver bullet. It is a well meant policy which is struggling to gain attractive influence because the people are worried about the here and now and not some anticipated increased employment in an undefined future," he said.
"When folks are desperate, it becomes about now. What is my child eating tonight? Where is my next rent coming from and what do I do about my daughter's ripped school uniforms now? So a national increase in industrial productivity is not an immediate need to give a second thought."
" Whilst this mind-set is not ideal, it is real. So the policy makers who are making all these rules in good faith should also factor that someone will not wait for tomorrow when they can't survive today. The accusation out here is that because of the immediacy of the need to survive everyone including government is in a crisis management mode," he added.
He said government is accused of making knee jerk jerk policies without a thorough impact analyses which includes grassroots consultation.

"With some of the perceived volte faces the nation sees, there is some credence in the accusation. Now that Zimbabwean Domestic Industry is enjoying protectionism, it should expand, innovate and increase its output to benefit the owners, workers and the whole supply chain in Zimbabwe. This means that industry should now pour resources. They have to find a way around the difficulties in accessing capital and expand. If they don't, then the government took tough unpopular decisions for nothing," he said.

Source - Byo24News