Pro­tec­tion­ist poli­cies good for in­dus­try

The Herald (Zimbabwe) - - Insight -

There is noth­ing as damp­en­ing as cel­e­brat­ing a fes­tive sea­son char­ac­terised by er­ratic food sup­plies, mas­sive fuel queues and a gen­eral spike in the price of ba­sic com­modi­ties. Gen­er­ally, an ad­e­quately cap­i­talised in­dus­try should be in a po­si­tion to pro­duce enough goods and ser­vices to sat­isfy lo­cal con­sump­tion and re­main with sur­plus to sup­ply re­gional and in­ter­na­tional mar­kets and earn for­eign cur­rency to buy essen­tial sup­plies that help oil an econ­omy.

As the coun­try grap­ples with for­eign cur­rency short­ages, un­em­ploy­ment and the gen­eral de­cline in pro­duc­tion and ca­pac­ity util­i­sa­tion by many com­pa­nies, it is im­per­a­tive for Gov­ern­ment to adopt some ex­tra-or­di­nary mea­sures to pro­tect con­sumers so that they are not ex­ploited by some un­scrupu­lous in­dus­tri­al­ists.

Yes, we ap­pre­ci­ate that some com­pa­nies are fail­ing to ac­cess for­eign cur­rency from the Reserve Bank of Zim­babwe, but it is dis­il­lu­sion­ing to note that oth­ers that are ac­cess­ing the money from the cen­tral bank also join the band­wagon that is ex­ploit­ing the con­sumers.

To cush­ion lo­cal com­pa­nies from be­ing choked by for­eign prod­ucts that are pro­duced at low cost, some of the ba­sic com­modi­ties were re­moved from the Open Gen­eral Im­port Li­cence and were cov­ered un­der var­i­ous Statu­tory In­stru­ments in­clud­ing SI64 of 2016.

How­ever, de­spite all these ef­forts, it ap­pears some play­ers in the econ­omy are not ap­pre­ci­at­ing these ges­tures and they con­tinue in­creas­ing prices, with oth­ers rais­ing a plethora of is­sues in­clud­ing high cost of pack­ag­ing ma­te­ri­als among oth­ers that they claim were im­ported.

It is against this un­set­tling back­drop that Gov­ern­ment has re­laxed reg­u­la­tions on the im­por­ta­tion of ba­sic com­modi­ties into Zim­babwe and in­vited peo­ple and or­gan­i­sa­tions with free funds to ap­proach the In­dus­try and Com­merce Min­istry to ob­tain li­cences to im­port the goods.

In­dus­try and Com­merce Min­is­ter Dr Mike Bimha an­nounced this on Sun­day, ar­gu­ing the mea­sures were taken to en­sure avail­abil­ity of ba­sic com­modi­ties and sta­bilise prices ahead of the fes­tive sea­son.

There has been a steady in­crease in prices of ba­sic com­modi­ties in the past two months due to for­eign cur­rency short­ages that have seen man­u­fac­tur­ers strug­gling to get hard cur­rency to pro­cure ba­sic com­modi­ties.

As Gov­ern­ment dishes out im­port li­cences to peo­ple with free funds to aug­ment sup­plies by lo­cal firms, it is our humble sub­mis­sion that ev­ery­thing must be done in a man­ner that does not fo­ment chaos in the econ­omy ahead of the fes­tive sea­son as well as the forth­com­ing gen­eral elec­tions next year.

The bene­fac­tors of the im­port li­cences are not in char­ity work and there­fore there is a greater need for Gov­ern­ment to en­sure that fel­low Zim­bab­weans do not ex­ploit their coun­try­men. The fail­ure by in­dus­tries to sup­ply com­modi­ties de­spite Gov­ern­ment sup­port shows there is a greater need to strike a bal­ance that en­sures that in the long run, we do not oblit­er­ate lo­cal firms.

Inas­much as the SI64 of 2016 was one day go­ing to be lifted, we im­plore au­thor­i­ties to en­sure some lo­cal firms that es­tab­lished some plants to in­crease pro­duc­tion af­ter the pro­mul­ga­tion of the Statu­tory In­stru­ment are not just thrown into cut-throat com­pe­ti­tion from for­eign firms that en­joy economies of scale as well as cheap cap­i­tal.

The sus­pen­sion of the re­stric­tions should be done in a man­ner that does not see com­pa­nies los­ing con­fi­dence in Gov­ern­ment poli­cies — there is a greater need for pol­icy con­sis­tency and not ad hoc ar­range­ments.

We in­sist that only prod­ucts that lo­cal com­pa­nies have shown have no ca­pac­ity to pro­duce should be al­lowed into the coun­try, but still un­der strict mon­i­tor­ing to avoid sat­u­rat­ing the mar­ket with for­eign cheap prod­ucts.

As eco­nomic lead­ers hunt for so­lu­tions to the coun­try’s chal­lenges, they should also not pay lip ser­vice to the pric­ing sys­tem in this coun­try that has trig­gered high pro­duc­tion costs that have even­tu­ally been passed on to con­sumers.

The cost of en­ergy, wa­ter, rates, trans­port, taxes and levies are gen­er­ally high, costs that have taken a toll on pro­duc­tion ex­pen­di­ture.

There­fore, re­cent calls by par­lia­men­tar­i­ans for Gov­ern­ment to have a relook into the pric­ing of fuel in Zim­babwe are wel­come. There is no way Gov­ern­ment can com­plain of high com­mod­ity prices at a time when all these other cost driv­ers are not be­ing con­tained at Gov­ern­ment level.

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