Industry and Commerce, Minister Mike Bimha
THE Ministry of Industry and Commerce has consolidated a number of Statutory Instruments (SIs) issued in the past year to control the importation of goods which are available on the domestic market.
The consolidation was effected through SI 122 of 2017 in the Government Gazette issued on Friday last week.
According to industry players, SI 122 would be a reference point for previous SIs, including SI 64 of 2016, which removed about 100 products from the open general licence to encourage the consumption of locally manufactured products.
Products that were removed from the open general import licence under SI 64 include fertilisers, plastic pipes, wheel barrows, roofing frameworks, tinned fruits and vegetables, dairy products, furniture, coffee creamers and petroleum jellies.
Previously, government had gazetted a ban on the importation of batteries, candles, floor polish, tobacco twines, second-hand clothing, blankets, 23 pharmaceutical products, milk, potatoes, onions, biscuits, sugar, poultry, meat products and yeast under a different SI.
Building materials, electrical goods, agricultural implements, shoes and blankets were among products that government also removed from the open general licence.
“SI 122 is a consolidation of fragmented SIs into one,” said Kipson Gundani, chief economist at Buy Zimbabwe, one of the organisations that have been campaigning for import restrictions to boost domestic production and consumption.
“If one wants to check which goods have been removed from the open general licence, they can now use one SI,” Gundani said.
On paper, government hopes that by introducing measures to control the importation of some goods, consumers would switch to domestic products and increase revenues for local producers, whose products have been failing to compete with imports.
The strategy has helped some companies increase their capacity utilisation and improved investment. Finance and Economic Development Minister Patrick Chinamasa last week told Parliament that the policy had resulted in a 12 percent increase in exports.
But a foreign currency crisis appears to have undermined this achievement, considering that the majority of companies still rely on imports for raw materials.
A government report in June indicated that SI64 had unlocked at least US$100 million in foreign direct investment (FDI) inflows since its introduction last year.
A report by the Ministry of Industry presented before the Senate said apart from FDI inflows, output in some domestic firms had increased by up to 100 percent in the past year, as consumers switched to local products.
In the presentation, Industry and Commerce Ministry, Mike Bimha, said some firms that used to export to Zimbabwe but had been affected by the import ban had set up local manufacturing plants in the country.
Among the big foreign firms that invested in the country include Indian multinational, Varun Beverages, which has set up a US$30 million bottling plant in Harare under the Pepsi brand. Pepsi drinks are currently imported from Zambia.
Willowton and Trade Kings have also invested in the country, with combined FDI estimated at about US$65 million.
“Willowton group of companies is building a US$40 million factory in Mutare to produce cooking oil and soap,” Bimha said.
“Trade Kings Zimbabwe is putting up a US$15 million state of the art detergent plant Harare. Varun Beverages is building a US$30 million Pepsi bottling plant in Harare. A number of South African companies have expressed interest in investing in Zimbabwe,” the Bimha told Senators.