Confederation for Zimbabwe Industries (CZI) president Busisa Moyo Wednesday said the industrial body welcomes measures by Government to remove certain products from the open general import licence adding this will spur local industry’s productivity.
Addressing journalists in Bulawayo, Moyo said the country’s economy is not yet in equilibrium and therefore the manufacturing industry needs interventions such as the recently gazetted Statutory Instrument 64 of 2016.
“While we are incubating and nurturing our industry support for local industry will be important considering that the Zimbabwe economy is not yet in equilibrium. Our environment is saddled with high cost in which businesses incur and this needs to be acknowledged,” said Moyo.
He said the cost driver study carried out by Zimbabwe Economic Policy Research Unit (ZEPARU) showed the county’s internal costs and costs of living are greater than its regional peers.
“Businesses in Zimbabwe are operating in a high cost environment this necessitates support for industries,” said Moyo.
He said the high costs were in fuel prices and “leaded fuel in Zimbabwe is 55 to 60 cents but as you are aware at the pump we pay a dollar plus these are some of the inefficiencies.’
Moyo said the manufacturing sector is incurring that high cost upfront so when they produce a bottle of mayonnaise locally they get a cost upliftment and rentals are very high.’
He said, there is need for internal devaluation to deal with the high cost environment so that local businesses can compete fairly in the market and lack of balance support will allow the high cost environment to persist.
“We have a challenge of high cost environment as a result Government has come to support local industries because they recognise that we are in a high cost environment. Once we address this high cost environment we will also address issues with export competitiveness and current account deficit since we are a net importer.’’
He said exports are not happening because Zimbabwe is not cost competitive as a country so there is a need to impose import restrictions to revamp local industries.
“Once our industries are functional things like duty and restrictions will became a non-issue because we will be competing as a manufacturing sector, Moyo said.
He said, currently the country is in a programme of import substitution because there is a deficit.
‘‘We need import substitution mechanism, if something can be produced locally as a country we should be united and allow it to be produced locally.’’
Moyo also said imports continue to outweigh exports and this was fuelling the already tight liquidity situation through externalisation and the restriction will instead increase the growth of value added exports and import substitution of commodities and essential goods that the country is capable of producing locally.
Under the new rules, those who want to import listed goods have to apply for a permit which costs $30 and is valid for three months. Before acquiring the permits, those applying have to justify the need to import the particular goods.