Zim to rejig SI 64 as SA flexes economic muscle

SOUTH Africa’s recommendations on the reduction of surtax and duty on 112 products is set to be discussed by Cabinet soon, Industry and Commerce minister Mike Bimha has said.

BY TATIRA ZWINOIRA

Minister of Industry and Commerce Mike Bimha
Minister of Industry and Commerce Mike Bimha

Speaking to NewsDay on the sidelines of the Confederation of Zimbabwe Retailers breakfast meeting on the controversial Statutory Instrument 64 of 2016 on Monday, Bimha said his team was working on the recommendations before the Sadc meeting scheduled for this week.

This came after South Africa flexed its economic muscle in response to Statutory Instrument (SI) 64 of 2016, which now restricts the importation of over 40 products.

The neighbouring country has requested the review of duty and surtax on 112 products.

“Our economists are working flat out. They have actually been working beyond the normal working hours to ensure that we have this report as quickly as possible. I would also want to make sure I brief Cabinet before I go to Sadc. So, it is progressing well and I am sure we will be able to share with our colleagues what is happening in Zimbabwe,” Bimha said.

Zimbabwe is currently in breach of the Sadc Protocol on Trade of 1996 under Article seven’s “Quantitative Import Restrictions”, section one, which states: “Member states shall not apply any new quantitative restrictions and shall, in accordance with Article 3, phase out the existing restrictions on the import of goods originating in Member States, except where otherwise provided for in this protocol.”

Article three states that consultations must first be made with the Committee of Trade Ministers in Sadc before looking any adjustments to import policies.

It lists conditions and processes in which a member state must take in changing those regulations.

In 2015, Zimbabwe imported goods and services worth $1,8 billion from South Africa, according to DTI statistics.

A Sadc extra-ordinary Committee of Ministers meeting is scheduled for next week on Wednesday.

It also came at a time when the construction of the Botswana-Zambia Kazungula Bridge was nearing completion at an estimated cost of $234 million.

The bridge will bypass Zimbabwe and act as an alternative trade route to Beitbridge.

Economist John Robertson said he believed South Africa was flexing its muscle as a member of Sadc, but due to it being the biggest player in the region, they should be taken very seriously.

“I know they are building the Kazungula Bridge and are nearly finished. This would mean all the traffic from South Africa would go through Botswana to Zambia and bypass Zimbabwe completely and that would be our fault and an enormous cost to the country,” he said.

Using statistics released from the taxman Zimbabwe Revenue Authority, this could potentially cost government millions of dollars in revenue.

The total of customs, excise duties and value-added tax on imports for the first half of the year was about $620 million.

Another economist, Kipson Gundani, said this could be the signalling of a trade war between the two
countries.

“It signifies the improper integration of the region, where South Africa is the predominant supplier of manufacturers at the detriment of fellow member states industrialisation agenda,” he said.

Gundani said when the Kazungula Bridge is completed, Zimbabwe would lose its “traffic and centrality position in the Sadc corridors”.

Sources say the frantic efforts by government indicate it is aware of the potential implications if South Africa’s recommendations are not met.

16 Comments

  1. There’s actually no boarder between Zambia and Botswana and that bridge is in Zimbabwe. In any case, if SA is not interested in our industrialization, then we will keep on going there looking for employment.

    1. when last did you hold an atlas map?

    2. The 4 borders don’t actually meet at a point. There’s a border between Zambia and Botswana of about 60 metres and the bridge crosses this place. Beacons placed at the bottom of the river indicate where the borders end.

  2. We are a selfish lot. We think the way we bully our citizens is also the way we can bully other countries. Industry in Zimbabwe is just not producing let us see rotten rice, rotten eggs, rotten beans, rotten crisps, rotten maputi, rotten drinks, rotten margarine, rotten cooking oil, expired soaps, expired perfumes and deodorants, expired beers in trenches to show that they are manufacturing but no consumers.

  3. SA to Lusaka via Zim is shorter than SA to Lusaka via Botswana by about 100km so it’s more economical to use Zim, separis paribus. The problem is that Zim has too many roadblocks and corrupt police. Zim will have to compete with Botswana. Just cut the roadblocks, widen (or even dualise) Beitbridge to Harare road, speed up processing of cargo at the borders. Bots would not be able to compete, I tell you.

    1. On another note, the Botswana-Zambia highway does not have too many roadblocks and no toll gates, so the 100km distance is compensated by saved revenue and time. On the Botswana side, it takes less than an hour to clear a truck compared to 2 days in Beit Bridge. We shot ourselves in the foot. Again, once traffic increases, Botswana will charge concessionary rates.

    2. Mutunhu Une Mago

      ceteris paribus

      1. Kikiki, I misspelt that one. Thanks

    3. Translate the 100km into fuel/running costs & you’ll probably get about 20litres saving for that 100km stretch. Diesel costs about $1.17, meaning less than $25.00 for the 20litres. Now compare this with the many roadblocks & toll fees in Zimbabwe versus Botswana & you’ll see that Zimbabwe is still a very expensive route

      1. As I said, the roadblocks need to go. And there is need to increase clearance speed. And on the fuel cost, it is in fact even cheaper in Bots (about 80c). However, once more traffic is routed through Bots there is gonna be congestion as well so if Zim sorts these other problems then we will be fine. Bots also has its own problems: too many domestic and wild animals on the roads. In addition, trucks don’t drive after 6 pm.

    4. Mugabe and his cabinet are more cruel than Ian Daglous Smith. They are happy to see us suffering. They must go. We are tired and fed up to

    5. 100km chete? I commute to work 200 km per day

  4. Even without the bridge, I never go through Zimbabwe. It’s a lot faster and cheaper to go through Botswana.

  5. Our “education” once again is under scrutiny. We lost focus of bigger business by settling for crumbs and scrubbing every truck for dimes at our ports of entry and roadblocks. We “forgot” we are landlocked. We overlooked the possibility of our neighbours actually coming up with an alternative route. Zimbabwe has taken the persona of its president – aloof, arrogant, mean and sadly hopeless, Spending more time insulting countries with better infrastructure/processes instead of learning from, and improving on them can hardly be described as being clever.

    Whilst improving local industry is first prize, there is nothing inherently wrong in accepting successful international businesses to operate locally….they also create employment and competition e.g Game, Shoprite etc

    The hole that Zanu PF and its bandits are digging will come out on the other side of the earth, hopefully not in the middle of the ocean.

  6. Truly speaking the Zanu pf gvt is economically illiterate. They make mistakes of kindergarten proportion on almost every move they make.

  7. Mugabe and his cabinet must go. They are more evil than Ian Douglas Smith. They are happy to see us suffering

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