Massive job losses loom

HARARE - The lifting of a protectionist policy introduced by former president Robert Mugabe’s regime last year to promote local production could see companies closing shop, resulting in massive job losses, industrialists warned yesterday.

On Tuesday, Cabinet revoked Statutory Instrument (SI) 122 of 2017 to allow individuals and companies to bring in basic commodities that are currently in short supply in a desperate bid to stabilise skyrocketing prices.

This comes at a time many Zimbabweans have been priced out of the market for basic goods due to steep price hikes blamed on acute shortages of foreign currency.

Yesterday, the Confederation of Zimbabwe Industries (CZI), warned that rescinding SI 122 was a recipe for disaster.

CZI president Sifelani Jabangwe said the import restrictions had helped revive dying companies, while enabling others increase their capacity utilisation.

“The SI 64 which later became SI 122 helped the economy to recover at a time we were in recession. In 2015, the growth of the economy was at 0,06 percent and thereafter growth was 3,7 percent in 2017 and we are now targeting six percent,” he said.

Jabangwe who leads Zimbabwe’s largest industrial lobby group said the removal of SI 122 means that several manufacturing companies are no longer protected from imports, particularly from South Africa — the continent’s largest economy.

“The challenge is that at the moment we are still ranked lowly in terms of ease of doing business and cost of doing business so by implication what it means (is that) companies are operating in a negative environment.

“You cannot be competitive in such a scenario. So (the net effect is that) we may see some closing, some retrenching and yet those were the things we were fighting against. You were not hearing company closure or retrenchments in the last period but that could just come back,” he added.

According to CZI, since the introduction of trade restrictions, industry had diversified, partnered with the agriculture sector, created a number of jobs and closed the gap on the leakage of money from the domestic economy.

Addressing journalists in Harare on Tuesday, Finance minister Mthuli Ncube said local companies had brought the amendment of SI 122 on themselves by allowing prices to go haywire.

Ncube said the measure would also reduce the demand for foreign currency as individuals and companies would be able to source their own funds to import.

The Oil Expressers Association of Zimbabwe (OEAZ) — a grouping of seven producers who supply 95 percent of the country’s edible oils — said they were concerned by the policy inconsistencies from government.

“Over $60 million of investment has gone into the sector since 2014 by big multinational companies like Surface Wilmar and Willowton. How will the investor community trust our national programmes when we open and close on policy at short notice?” queried OEAZ president Busisa Moyo.

He said industries built over the last nine years may not be able to recover from the setback, risking over 2 000 people employed by the sector.

“Most of the traders clamouring for unrestrained importation have no interest in contributing to the fiscus and are most likely to avoid all duties at the border which means government will lose the industries that they have built over the last nine years but will not be able to claw back the lost revenue from duties,” said Moyo.

Comments (12)

There is now way government can continue protecting profiteerers masquarading as industrialists. Who is employed anyway - not me of course. So let them close as long as basics are available at affordable prices.

willo - 25 October 2018

The country needs serious investment not protectionist policies that benefits no one other than a few individuals looking to profiteer.

Bill Hinch - 25 October 2018

we need food in the shop, its better for me not to have the money that to have money with nothing to buy....

Munya - 25 October 2018

Local business should shape up or ship out - it's as simple as that. The protectionists policies do not help anyone except a few selfish individuals always on TV to threaten us with job closure if protectionist measures are removed.

willo - 25 October 2018

I see from the comments that local manufacturers are not popular!

citizen - 25 October 2018

There is nothing to protect. The local industry is failing to meet the demand. Newspapers should not sensitize rubbish

doti yenja - 26 October 2018

Industry and commerce under Bimha former minister was one of 'control and ban' hence the disaster that is the economy today. Local industries must lobby the government until easy of doing business and cost of doing business enables them to compete favourably with imports full stop.

Sinyo - 26 October 2018

Ordinarily, local industry boosts job creation and increases a country's pride in looking after itself, unless of course, when the local products are of shoddy and inferior quality compared to imports but are expensive. Local industry tended to price their products at par with imports of far superior quality hence they lost support of locals. They were fleecing customers which is a difficult thing to defend. People are so informed these days they research prices and convert them to USD and can tell if they're being conned.

Sagitarr - 26 October 2018

A hardware store at Newlands is ellinf cement for 40USD, they accept USD only, can Sifelani defende that??

Rihana - 26 October 2018

A hardware store at Newlands is selling cement for USD40 a bag, and they accept US dollars only, and such vermin is supposed to be protected ?

Rihana - 26 October 2018

Those calling themselves industrialist talking nonsense must just shut up. They were being protected so that they grow in all spheres that is 1. growing to export and earn foreign currency, 2. Expanding their business activities like what Econet is doing right now, Produce quality goods with affordable prices locally and internationally and Create employment to locals. However these protected Companies aligned themselves into politics and divert their ethics of doing business. They joined chamisa to ruin this country for political gains. Now the government has done the most right thing by revoking that SI. Surely how can a Company being given forex by Government through and through continue to raise prices instead of lowering them. To make matters worse this whole thing happened overnight and without any justification of what had caused the sudden increase. Some went to the extent of removing goods from shelves into warehouses just to cause destabilization in the country. The aim was so clear to everyone with normal senses that this was a plan to cause demos in order to unseat the Government. This was part of chanyiswas plan which he was boasting of after losing the court petition. So I urge the Government to stop any forex allocation to these Companies. They must learn to produce and export fairly competing with the rest of the world. ZIMRA must extend its revenue base by taxing the indigenised who are now at the forefront of increasing prices especially in places such as the new locations like Calidonia, Ushehwokunze, Epworth and many others surrounding Harare.

shunguhadziurayi - 26 October 2018

How can a state chop and change currency in the way they have been doing someone/or a group of people have been benefiting

Z$ US$ Bondo what next? - 26 October 2018

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