Opinion / Columnist
Promote Zimbabwean products for economic revival
07 Jun 2016 at 06:35hrs | Views
It is sad to note that some Zimbabweans continue to import non-essentials or finished products while shunning local goods. The benefits that can be accrued by consuming Zimbabwean products are immeasurable.
"An economy that continually imports and fails to export will die." This statement proffered by a Zimbabwean economist Kipson Gundani is too true.
The current Zimbabwe economic malaise can be attributed to this disproportion among other things. As early as 2005, the former Reserve Bank governor Dr Gideon Gono decried the adverse impact imports were having on the country and came up with a conceptual framework on the "Buy Zimbabwe Campaign" with the aim of creating "a platform for economic turnaround based on the realignment of consumption patterns with the economy's productive capacities".
This was after the realisation that "contemporary evidence shows that no meaningful industrialisation strategy can occur without promoting local products".
Some 10 years later after mooting this noble idea and the subsequent launch of the "Buy Zimbabwe Campaign" in 2011, we are still going around in circles. This has resulted in the trade deficit continuing to widen with recent 2015 statistics standing at $3 billion when trade figures showed that exports amounted to $2,5 billion against $5,5 billion imports.
We cannot continue with this business as usual mentality as the country's over-reliance on imports has been identified as one of the contributors of the current liquidity crunch.
Industrialists and economists have always advised that we need to keep money inside the country to avert the liquidity crisis and massive company closures in the absence of foreign direct investment to boost industry. In Shona we have a saying "wakarumwa nechekuchera", a situation which aptly describe our situation. We cannot relax as a heavily importing country and expect a change in our fortunes.
Government is doing all in its power to address the anomaly, among other things the proposed domestic procurement index which will require retailers to cut imports and increase local product purchases. This in itself is not enough, but it's a start. Zimbabwe has been hailed for coming up with excellent policies which have failed on implementation.
Maybe we need to really examine our modus operandi as a country if we are ever going to move forward. This is after the Minister of Industry and Commerce Mike Bimha said; "I do not think we are doing enough as Government. A lot of directives and policy measures have been put in place, but for various reasons, this has not been followed through". The minister's honesty is commendable.
We could start with the proposed procurement legislation which the minister even admitted does not exist, "Right now, we do not have a single and strong legislation for local procurement, though we have reference in some pieces of legislation to address this issue."
The need for legislation can never be over-emphasised. South Africa has managed to promote its local products by the "Proudly South African campaign" which has a 75 percent local procurement accord explaining their success.
The United States of America enacted the Buy America Act of 1933 to certify that the government preferred procurement of local products.
We have both regional and global examples of success where the governments took the initiative to promote local products, a move which has seen these countries change their economic fortunes. For example, in 1997 Thailand was faced with an economic crisis which encouraged the government to introduce the Buy Thailand Campaign as part of a seven-step programme to assist in curbing unemployment and boost the local economy.
Reports also show that Government is doing everything possible to revive the economy amongst them the Cotton Pricing Model, Cotton to Clothing Value Chain, Industrial Development Fund, Leather and Leather Product Strategy, and National Competitiveness Bill.
Of major concern is we don't follow through on matters.
Right now we are talking of how the clothing industry collapsed because of "mabhero" or second hand clothes that are smuggled into the country. Government banned these on September 1, 2015, but nothing has been done to effectively deal with the problem. The second hand clothes market is still thriving. As much as we have sympathy for those whose livelihoods depend on "mabhero", the damage this has inflicted on the economy is inestimable. Is it not time to bite the bullet and enforce the ban if we have any hope of reviving our clothing industry?
Commendation should be given to the Buy Zimbabwe which was launched in 2011 with the sole objective of raising awareness and the profile of home-grown goods and services. It also seeks to lobby Government to enact laws and policies that support local producers and connecting local producers to retailers, consumers and other relevant stakeholders. Buy Zimbabwe efforts through its annual Buy Zimbabwe Awards should be applauded. The Buy Zimbabwe Awards honour outstanding local companies and individuals that have demonstrated resilience and commitment to job creation and reducing the import bill. Resources should be availed to Buy Zimbabwe as their efforts have assisted Government in promoting local products.
It is sad to note that some Zimbabweans continue to import non-essentials or finished products while shunning local goods. The benefits that can be accrued by consuming Zimbabwean products are immeasurable. Any laws that promote locally produced goods will increase industrial capacity utilisation which in 2015 had dropped to 34,3 percent from 36,5 percent in 2014. One of the reasons identified was low local demand, an anomaly that can be addressed by introducing a procurement accord and ensuring it is adhered to. The high demand for local products will translate into high employment levels. This is because consumption of locally produced commodities creates demand for local labour resources and contributes towards the reduction of the unemployment rate.
Many have heard how Zimbabweans bemoan "zhing-zhong", a term used to refer to low quality products which have flooded our markets over the years. Locally produced goods which are certified by the Standards Association of Zimbabwe (SAZ) will never short-change consumers on quality.
As the country leans towards local products, it is also pertinent that Government and the financial sector continue to help ailing companies through the Distressed and Marginalised Areas Fund (Dimaf). Dimaf was launched in 2011 as a $40 million fund to re-capacitate ailing companies in the country's second largest city of Bulawayo among others. As at March 2016, a sum of $29,5 million had reportedly been disbursed from the fund benefiting approximately 51 companies. Recently, Turnall Holdings secured $1million from Dimaf to improve its working capital levels. This is the kind of news we yearn for as a nation and not to hear companies folding and workers losing their livelihoods.
As much as Zimbabwe's economy is driven by market forces, some of our challenges have been linked to "too open economy".
We need to protect our own and the only way we can achieve that is to reduce the import bill and increase our exports. This is achievable if we protect our industries and consume our products.
Local is lekker.
"An economy that continually imports and fails to export will die." This statement proffered by a Zimbabwean economist Kipson Gundani is too true.
The current Zimbabwe economic malaise can be attributed to this disproportion among other things. As early as 2005, the former Reserve Bank governor Dr Gideon Gono decried the adverse impact imports were having on the country and came up with a conceptual framework on the "Buy Zimbabwe Campaign" with the aim of creating "a platform for economic turnaround based on the realignment of consumption patterns with the economy's productive capacities".
This was after the realisation that "contemporary evidence shows that no meaningful industrialisation strategy can occur without promoting local products".
Some 10 years later after mooting this noble idea and the subsequent launch of the "Buy Zimbabwe Campaign" in 2011, we are still going around in circles. This has resulted in the trade deficit continuing to widen with recent 2015 statistics standing at $3 billion when trade figures showed that exports amounted to $2,5 billion against $5,5 billion imports.
We cannot continue with this business as usual mentality as the country's over-reliance on imports has been identified as one of the contributors of the current liquidity crunch.
Industrialists and economists have always advised that we need to keep money inside the country to avert the liquidity crisis and massive company closures in the absence of foreign direct investment to boost industry. In Shona we have a saying "wakarumwa nechekuchera", a situation which aptly describe our situation. We cannot relax as a heavily importing country and expect a change in our fortunes.
Government is doing all in its power to address the anomaly, among other things the proposed domestic procurement index which will require retailers to cut imports and increase local product purchases. This in itself is not enough, but it's a start. Zimbabwe has been hailed for coming up with excellent policies which have failed on implementation.
Maybe we need to really examine our modus operandi as a country if we are ever going to move forward. This is after the Minister of Industry and Commerce Mike Bimha said; "I do not think we are doing enough as Government. A lot of directives and policy measures have been put in place, but for various reasons, this has not been followed through". The minister's honesty is commendable.
We could start with the proposed procurement legislation which the minister even admitted does not exist, "Right now, we do not have a single and strong legislation for local procurement, though we have reference in some pieces of legislation to address this issue."
The need for legislation can never be over-emphasised. South Africa has managed to promote its local products by the "Proudly South African campaign" which has a 75 percent local procurement accord explaining their success.
The United States of America enacted the Buy America Act of 1933 to certify that the government preferred procurement of local products.
We have both regional and global examples of success where the governments took the initiative to promote local products, a move which has seen these countries change their economic fortunes. For example, in 1997 Thailand was faced with an economic crisis which encouraged the government to introduce the Buy Thailand Campaign as part of a seven-step programme to assist in curbing unemployment and boost the local economy.
Reports also show that Government is doing everything possible to revive the economy amongst them the Cotton Pricing Model, Cotton to Clothing Value Chain, Industrial Development Fund, Leather and Leather Product Strategy, and National Competitiveness Bill.
Of major concern is we don't follow through on matters.
Right now we are talking of how the clothing industry collapsed because of "mabhero" or second hand clothes that are smuggled into the country. Government banned these on September 1, 2015, but nothing has been done to effectively deal with the problem. The second hand clothes market is still thriving. As much as we have sympathy for those whose livelihoods depend on "mabhero", the damage this has inflicted on the economy is inestimable. Is it not time to bite the bullet and enforce the ban if we have any hope of reviving our clothing industry?
Commendation should be given to the Buy Zimbabwe which was launched in 2011 with the sole objective of raising awareness and the profile of home-grown goods and services. It also seeks to lobby Government to enact laws and policies that support local producers and connecting local producers to retailers, consumers and other relevant stakeholders. Buy Zimbabwe efforts through its annual Buy Zimbabwe Awards should be applauded. The Buy Zimbabwe Awards honour outstanding local companies and individuals that have demonstrated resilience and commitment to job creation and reducing the import bill. Resources should be availed to Buy Zimbabwe as their efforts have assisted Government in promoting local products.
It is sad to note that some Zimbabweans continue to import non-essentials or finished products while shunning local goods. The benefits that can be accrued by consuming Zimbabwean products are immeasurable. Any laws that promote locally produced goods will increase industrial capacity utilisation which in 2015 had dropped to 34,3 percent from 36,5 percent in 2014. One of the reasons identified was low local demand, an anomaly that can be addressed by introducing a procurement accord and ensuring it is adhered to. The high demand for local products will translate into high employment levels. This is because consumption of locally produced commodities creates demand for local labour resources and contributes towards the reduction of the unemployment rate.
Many have heard how Zimbabweans bemoan "zhing-zhong", a term used to refer to low quality products which have flooded our markets over the years. Locally produced goods which are certified by the Standards Association of Zimbabwe (SAZ) will never short-change consumers on quality.
As the country leans towards local products, it is also pertinent that Government and the financial sector continue to help ailing companies through the Distressed and Marginalised Areas Fund (Dimaf). Dimaf was launched in 2011 as a $40 million fund to re-capacitate ailing companies in the country's second largest city of Bulawayo among others. As at March 2016, a sum of $29,5 million had reportedly been disbursed from the fund benefiting approximately 51 companies. Recently, Turnall Holdings secured $1million from Dimaf to improve its working capital levels. This is the kind of news we yearn for as a nation and not to hear companies folding and workers losing their livelihoods.
As much as Zimbabwe's economy is driven by market forces, some of our challenges have been linked to "too open economy".
We need to protect our own and the only way we can achieve that is to reduce the import bill and increase our exports. This is achievable if we protect our industries and consume our products.
Local is lekker.
Source - the herald
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