Import restrictions will boost local industry

EASURES by Government to remove certain products from the open general import licence are plausible, as some of the products that were inflating the import bill are produced locally.

Recent statistics from Zimstat show that the import bill continues to be inflated by non-essentials among them vegetables and fruits such as tomatoes, carrots, apples, peas, beans, lettuce and lemons.

Only yesterday, Finance and Economic Development Minister Patrick Chinamasa told parliamentarians that imports continue to outweigh exports and this was fuelling the already tight liquidity situation through externalisation.

Zimbabwe had, since dollarisation or even before, become a dumping ground for cheap products as foreign companies from bigger economies were selling their goods at a price lower than the average costs of production in this country all in search of the US dollar.

As such, Government has removed from the open general import licence a number — of what can be termed as trinkets that were aiding the rapid outflow of foreign currency.

Through the latest rules, provisions of statutory instrument 64 of 2014, anyone wishing to import will first have to secure a licence and must also justify why they think the products must be imported.

Among products listed for import control are coffee creamers, camphor creams, white petroleum jellies, body creams, plastic pipes, fittings, bottled water, mayonnaise, salad creams, peanut butter, jams, mahewu, canned fruits, vegetables, yoghurt and flavoured milk.

This way, the Government will be able to screen out products that can be produced locally, creating jobs for the jobless majority while helping local industry satisfy demand resulting from this.

It’s simple economics really, it’s not a Zanu-PF or any political policy that the prophets of doom are busy pushing. Economics states that controls will lead to a decrease in imports; domestic firms have less competition and so are able to continue. The domestic economy will also be strengthened because unemployment will be down due to the domestic firms and they will be able to produce and sell more goods with a lot less difficulty, giving firms less reason to decrease costs by decreasing the workforce.

Buy Zimbabwe, the local lobby group for local content, has repeatedly affirmed that ultimately it’s about building our competitiveness and enhancing sensitivity to mar- ket forces.

However, we should bear in mind that markets are a critical factor of production and we should not be blind to practices in those countries that we trade with, not only do they offer huge subsidies, they also have robust local procurement laws.

It also follows, given the current financial situation in Zimbabwe, Government cannot offer subsidies to local companies and that local companies cannot access international cheap credit, it leaves our producers at a disadvantage.

The real issue is that given the current priorities, liquidity crunch and numerous trade barriers that have been put on a country that is using the United States Dollar at the moment, we need to preserve on the monies we have.

We cannot allow a situation that sees industry close, agriculture collapse, unemployment rise, Government fail to pay suppliers and yet our appetite for externalising money keeps growing.

At some point, all things will grind to a halt.