Development of Local Content Policy to go ahead
PRESIDENT Emmerson Mnangagwa says his Government will forge ahead with development of a Local Content Policy to guide and promote growth of value chains in the economy.
In his State of the Nation Address on Wednesday, the President said revamping the economy was his top priority and outlined a programme of action towards that goal.
In particular, he stressed the importance of developing a Local Content Policy so as to increase manufacturing contribution to Gross Domestic Product (GDP).
“Government is already developing a Local Content Policy to guide and promote the development of local value chains in the manufacturing sector as well as boost overall economic integration. Over the years, exports have been contributing more than 60 percent of the country’s foreign currency earnings, ahead of other sources, such as foreign direct investment and diaspora remittances,” said President Mnangagwa.
He expressed concern that the country’s exports continue to be dominated by primary commodities, with minerals and tobacco contributing over 80 percent of the total export earnings.
“Manufactured products and services currently contribute less than 10 percent each, respectively, to total export earnings. Government will thus maintain the policy thrust on the beneficiation and value addition of local exports,” said the President.
He, however, acknowledged positive growth registered in the manufacturing sector, mainly by beneficiaries of Statutory Instrument 64 of 2016, which limited the importation of certain basic commodities that are locally available, thereby giving local industry space and capacity to retool and recapitalise.
Recent surveys have confirmed that manufactured output volume grew during the year under review as a result of import control regulations. President Mnangagwa said his Government will continue to facilitate a conducive environment for the sector to grow whilst at the same time balancing the obligations and requirements Zimbabwe has under regional and international protocols. He also condemned the recent spate of price increases. “I appeal yet again to our business community to show restraint and avoid wanton hiking of prices, bearing in mind the fact that such actions raise the appeal of cheaper imports, which has the effect of undermining current efforts to develop the local industry,” said the President.
Government has also put in place monetary incentives for the support of domestic and export production. These include a small scale gold support facility ($40 million), export support facility ($70 million), tobacco support facility ($28.6 million), tourism support facility ($10 million), horticulture facility ($10 million), and the business linkages facility ($10 million).
All these measures are meant to ensure Zimbabwe achieves an all-out export orientation strategy that is essential towards a sustainable high growth trajectory.