Local Content Policy formulation under way:
ZIMBABWE has started formulating the Local Content Policy (LCP), which will stipulate percentage thresholds for goods that will qualify as locally produced to support domestic production, Industry and Commerce Minister Dr Mike Bimha said yesterday.
The local content regulations would form a key part of Government broad industrialisation initiatives and would be considered as “smart” protectionism measures, said Dr Bimha while delivering a key-note address during the opening of the Zimbabwe Association of Pension Funds (ZAPF) 42nd annual general meeting in Victoria Falls yesterday.
“We are saying there are ways of supporting the local industry without necessarily issuing a Statutory Instrument to regulate importation and this mechanism is when you can come up with a policy to encourage your citizens; your corporates to buy things produced locally. This is what we call the local content policy.
“It’s a smarter way of protecting and supporting your own industry without necessarily issuing Statutory Instruments,” said Dr Bimha in apparent reference to the SI 64 imposed by the Government last year to restrict imports of goods that can be produced locally.
After the promulgation of the SI64, Zimbabwe came under serious attacks particularly from its key trading partners which felt the Government was closing business on them.
South Africa even threatened some retaliatory measures to counter the import restrictions.
“We were so much under pressure particularly from the private sector in South Africa. We went to engage the relevant ministry in South Africa; we told them that the products we cannot produce, we can import, but not those we can produce in sufficient quantities.”
Dr Bimha said in the Sadc region and as provided for by the WTO, there is a process that has to be followed to impose restrictions such as those contained in SI 64 but the Government did not follow the process as it takes very long to get approvals.
“Our house was burning and we said we can’t follow those procedures, which take probably a year for approval,” he said.
Companies benefiting from the SI 64 have registered a significant increase in their order books from 30 percent to 60 percent.
On the LCP, DR Bimha said the Government has since engaged the Zimbabwe National Chamber of Commerce and the Confederation of Zimbabwe to come up with recommendations.
Meanwhile, Dr Bimha said there was need for pension funds to engage in partnerships with the private sector to help with liquidity that would enhance productivity while encouraging them to be transparent in their operations by explaining their operations to stakeholders including the Government, employers, pension funds members and pensioners.
“Transparency in the operations of the industry will go a long way in reducing suspicion and improve confidence in the sector,” he said.
About 400 delegates are attending the ZAPF annual conference running under the theme “Navigate the path to retirement in a dynamic environment.”