"Reducing Import Tariffs On Basic Commodities Will Kill Local Industry"1 year ago
Local manufacturers have criticised Government’s decision to reduce import duty on basic commodities to enable citizens with free funds to import groceries to meet their personal needs.
On Saturday, Finance and Economic Development Minister Mthuli Ncube said that import tariffs on basic commodities will be slashed to enable citizens to access affordable basic commodities from other countries.
The move is expected to force local manufacturers to reduce their prices due to competition.
However, Confederation of Zimbabwe Industries president Kurai Matsheza told NewsDay that the measures had the capacity to cripple the economy. Said Matsheza:
It doesn’t sound like a good policy because if there was a problem, what they should do is reduce duties on raw materials.
Are you a Civil Servant or Pensioner in Zimbabwe?
Get a smartphone 📱 on Zero Deposit. 24 hours to process.
That move alone means the local manufacturers will not be able to manufacture the goods.
The imported goods will be on our shelves. So the productive sector out there will be very busy filling our shelves here.
So if you look at the value chains that are involved, they are killing our economy. So I don’t think that helps at all.
Market analyst Maxwell Saungweme said that the statement by Ncube shows that the Government has run out of ideas on how to deal with ongoing economic challenges. Saungweme said:
This statement is an admission by the government that it has failed and it is also an admission of cluelessness, policy inconsistencies and contradictions which are tell-tale signs of people who have run out of ideas.
Last week, the President issued a statement that seemed to be discouraging the use of foreign currency. So this is an admission of hopelessness.
Meanwhile, Zimbabwe National Chamber of Commerce (ZNCC) chief executive Christopher Mugaga said the Government has done the right thing by reducing import duty on basic commodities. He said:
Ncube simply opened the floodgates for realism. If we look at our local production, look at the contribution of factories, gross domestic product and all, it has been going down.
Now with the current issue, it will determine whether we will be able to satisfy this market. So I think Ncube just did the right thing.
That statement is the reality, we need to liberalise a bit in terms of product accessibility for our consumers which is important to a certain extent.
There is certainly no shocker; I’m surprised when people are surprised by that statement. I’m not sure what they expected.
In the statement issued on Saturday, Ncube also said grain farmers will be paid 30 per cent of their proceeds in US dollars when they deliver grain to the Grain Marketing Board.