Im­port re­stric­tions fail to help Zim­babwe’s pro­duc­ers

CityPress - - Business & Tenders - MEM­ORY MATARANYIKA busi­ness@city­

Zim­bab­wean com­pa­nies are bat­tling with a flood of im­ports that are plac­ing prof­its and pric­ing un­der pres­sure, de­spite re­stric­tions in­tro­duced by Pres­i­dent Robert Mu­gabe’s gov­ern­ment last year.

The re­stric­tions were put in place to curb the smug­gling of fin­ished prod­ucts from neigh­bour­ing coun­tries and the as­so­ci­ated thriv­ing in­for­mal sec­tor.

Goods that are smug­gled into Zim­babwe come from South Africa, Zam­bia and Botswana, ac­cord­ing to City Press’ ob­ser­va­tions, and in­clude al­co­hol and cool drinks, chicken, cook­ing oil, de­ter­gents, sugar and agri­cul­tural pro­duce.

Delta Corporation, the Zim­babwe as­so­ciate unit of AB InBev, said im­ports were hurting the rev­enue of its soft drink busi­ness.

“There was a marked in­crease in im­ports of soft drinks, mainly from Zam­bia and Mozam­bique, in the sec­ond half of the year,” the brewer said.

This had con­strained rev­enue for the year ended March by as much as 10%.

Ac­cord­ing to sta­tis­tics agency Zim­stat, South Africa is the main ex­porter to Zim­babwe, with an­nual ship­ments worth $2.1 bil­lion (R27.8 bil­lion).

Sin­ga­pore is the source of about $1.1 bil­lion worth of goods shipped into Zim­babwe, bring­ing the coun­try’s to­tal im­port bill to $5.2 bil­lion for last year, lead­ing to a trade deficit of about $2.4 bil­lion.

Wil­lia Bony­ongwe, chair of the Zim­babwe Rev­enue Au­thor­ity, said that the im­port re­stric­tions in­tro­duced by Zim­babwe last year were be­ing af­fected by the liq­uid­ity sit­u­a­tion in the coun­try.

“Pro­cure­ment of im­ported raw ma­te­ri­als and cap­i­tal equip­ment has be­come a night­mare, and there are long for­eign pay­ment queues at the Re­serve Bank of Zim­babwe,” Bony­ongwe said.

Of­fi­cials at Nestlé Zim­babwe said they were de­vel­op­ing new, smaller pack­ag­ing in an ef­fort to bet­ter mar­ket their prod­ucts in a coun­try that has been hit hard by cash short­ages.

Im­ports have also been height­en­ing com­pe­ti­tion for Nestlé Zim­babwe.

Kumbi­rai Kat­sande, chair of Nestlé Zim­babwe, said: “The min­i­mum price we had for our prod­ucts was $1.50, so we had to come to the mar­ket with pric­ing that is less than 50c, which will en­able us to com­pete against some im­ported prod­ucts that are cheaper than ours.” The com­pany man­u­fac­tures con­sum­ables such as milk and ce­re­als.

Zim­babwe In­dus­try and Com­merce Min­is­ter Mike Bimha said gov­ern­ment knew that im­ports caused prob­lems for lo­cal man­u­fac­tur­ers. “We are aware of the im­ports that come into the coun­try, and we have set up an in­ter­min­is­te­rial com­mit­tee to look into this is­sue be­cause our ef­forts will cut across de­part­ments,” Bimha said. He said that the com­mit­tee would fo­cus on, among other things, in­creased mon­i­tor­ing of the flow of goods through the Beit­bridge bor­der post, the mon­i­tor­ing of goods on shop shelves and deal­ing with in­for­mal traders.

Kip­son Gun­dani, an econ­o­mist at ad­vo­cacy group Buy Zim­babwe, said gov­ern­ment should deal with the ram­pant smug­gling of fin­ished prod­ucts into the coun­try.

“We have a law that deals with im­ports in an ef­fort to re­duce our im­port bill. But we are still see­ing goods com­ing into Zim­babwe through our por­ous borders. Gov­ern­ment should fix this if we are to al­low our lo­cal com­pa­nies to grow pro­duc­tion and ca­pac­ity,” said Gun­dani.


STRUG­GLING Zim­bab­wean Pres­i­dent Robert Mu­gabe

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