'SA to benefit from SI 122 lifting'

HARARE - South Africa is seen benefiting immensely from the lifting of Statutory Instrument (SI) 122 of 2017, economic analysts say.

On Tuesday, government lifted a two-year ban on the import of basic commodities, in a move likely to be welcomed by South African businesses.

The lifting of the ban seeks to allow importation of products in short supply as the country is facing critical shortages of commodities such as cooking oil, sugar and cement, which have run out in shops as a result of panic buying and low productive capacity from ailing industries.

In 2016, government introduced SI 64, before reinforcing it with SI 122 of 2017; both limited importation of a long list of basics as a part of strategy to protect local industries.

However, local industries have failed to step up to the plate and the country still receives a large chunk of its consumer and retail goods from South Africa.

Figures released by the Zimbabwe National Statistics Agency last week show that Zimbabwe imported goods from South Africa worth $193,6 million in September, reflecting a 17 percent increase from imports worth $175.4 million the same period in 2017.

Economist John Robertson said lifting of the import ban would help some South African businesses.

“You will remember that when SI 64 was introduced there was an outcry from many business owners in Musina, who said they would lose most of their customers, which are mainly Zimbabweans. So, given that we are approaching the festive season, such businesses are definitely going to get a boost because you are likely to see enhanced spending.”

The chief executive office of the Zimbabwe National Chamber of Commerce (ZNCC), Chris Mugaga said lifting the ban was long overdue.

“This is something we have been advocating for because the government introduced the import restrictions with a noble initiative to encourage growth of local industries. However, our industries have not been growing because they continue to face challenges.

“What we need to do as a country is come with an industrial policy that will articulate plans for our ailing industries. But for now we need to liberalise the markets so that we do not experience the shortages that we are facing.”

Blessing Machiva, an economist, welcomed the lifting of SI 122 of 2017, saying Zimbabwe has been surviving on importing almost 60 percent of its requirements, ranging from crude oil, fuel, cereals, clothes, electricity to car parts.

“The reasons behind our local industries’ failure to produce are not demand-related but these are problems that lay deep in the structure of the economy. Government was supposed to address these first and deal with issues of supply before we start implementing measures to boost demand. It’s not a feasible idea to boost local demand of a commodity that is not available in the market,” said Machiva.

“Many industries closed and the ones’ that survived are operating below full capacity levels and are even importing most of their raw material requirements, a very good example being the cooking oil manufacturers that are surviving on importing crude oil from South Africa, then only refine and package it here in Zimbabwe.

“So if we talk of promotion of the local industries which are importing almost 100 percent of their raw material requirements, something that this country is able to produce and provide, I think our policies will be farfetched.”

Machiva said most of the manufacturing industries that were operating in Zimbabwe in the 1980s were heavily dependent on the primary industry for most of their requirements, particularly, the agricultural industry hence the aftermath of land reform programme caused a huge decline in the major raw material components and the comparative advantage was lost, causing these manufacturers to relocate to other areas in the region.

He said Zimbabwe need to bring back and regain that advantage by boosting the agricultural sector.

“…the reason why Surface industry is importing crude oil is because the local farmers are failing to produce enough soya beans for crushing to meet the local demand for oil, that’s the problem,” he said.

“Other problems range from dilapidated capital equipment, obsolete technology, raw material shortage, poor policies, and poor management to rampant corruption especially to the office holders. These challenges are crippling our local industries, hence there is need to solve these and raise local production before we can talk of restricting imports.” – Business Day/Staff Writer


 

Comments (2)

No its commerce that will benefit from a market flooded with goods resultantly citizenry will benefit from improved supply where price and quality will be determinant. Those that arm-twisted the Government to come-up with the SI 64 were criminals just like the Price and Control Commission by Goodwills.

Sinyo - 27 October 2018

We supply petroleum product such as JP54, D2, D6, JET A1, Serious buyer should contact now via (neftegazoiltrading@yandex.ru)

Vico Pei├čker - 6 November 2018

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