Zimbabwe fails to adhere to key Sadc Protocols

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THE subdued economic performance in Zimbabwe has led to the country failing to adhere to key Sadc protocols on trade related to tariff reductions, the Competition and Tariff Commission (CTC) has said.

Kudzai Chimhangwa
Business reporter

Although the country experienced a modicum of economic stability soon after the inception of the multi-currency regime in 2009, most local industries failed to recapitalise and achieve requisite capacity utilisation levels to effectively compete at national and regional fronts.

Zimbabwe’s manufacturing sector inevitably continues to suffer in the face of an influx of cheap imports.

Government has continued to use protectionist measures for key products made by the few operating industries in the country.

However, Zimbabwe is a signatory to the Sadc Protocol on Trade where member states agreed to phase down tariffs for goods in four categories, depending on the degree of sensitivity of the goods.

The criteria for sensitivity includes factors such as revenue generation, employment creation and strategic importance, among others.
The CTC is currently carrying out consultations with the manufacturing sector under the Sadc Protocol on Trade, with a view to initiating a tariff phasedown for sensitive products classified under category C.

“Zimbabwe phased down its tariffs for categories A and B, constituting 87% of tariff lines,” the commission said.

The CTC said due to the economic challenges faced by the country, the phasing-down of tariffs under category C was supposed to commence in 2009 and end in 2012 but was not implemented.

Zimbabwe applied for derogation from implementing the phase down pursuant to the Sadc Trade Protocol.

The derogation entailed that Zimbabwe would suspend phasing down its tariffs for category C products until 2012 after which yearly reductions would resume and be completed by 2014.

However, the economic challenges faced by the country remain unabated resulting in the country failing to honour its obligations.

“The commission intends to carry out consultations with industry to gather inputs that would inform the way forward with regard to whether or not to apply for further derogation for category C,” the commission said.

Products under C category range from cements, soap, matches, sugar, fish or crustaceans, ceramic products, electrical machinery to paper, among others.

The commission said any sector affected and intending to apply for further derogation would need to submit stipulated information from a sectorial perspective.

Zimbabwe National Chamber of Commerce vice-president David Norupiri said industry would most likely prefer a further derogation as the economy was not performing well.

“Industry will certainly not entertain that, the reason why those tariffs were never adjusted is due to the need to control the inflow of imports into the country. Industry gave the nod to the Finance ministry to use those tariffs to enable industry to operate competitively,” he said.

Norupiri said Zimbabwe’s situation was not unique and pointed out that a whole lot of inconsistencies were occurring within Sadc trade as some countries were abusing certificates of origin.

He said South Africa, for example, currently has regulations governing the supply of cooking oil, where between 40 to 60% of local demand must be catered at local procurement level while the excess cooking oil would be exported using certificates of origin.

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