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CZI defends import restrictions

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THE Confederation of Zimbabwe Industries (CZI) has defended the government’s protectionist measures on local industries, saying such policies were for the long term benefit.

BY TATIRA ZWINOIRA

Speaking at the two-day financial markets indaba conference in Harare last week, CZI president, Busisa Moyo said industry has been misunderstood in that they have been calling for those policies for the long term.

“What we asked was for certain constraints of business to be removed with urgency, but our policymakers could not remove those constraints timeously. Which is why we said let us have time-bound support for the private sector, which then falls away after the period,” he said.

The CZI boss was responding to an inquiry by head researcher at Emergent Capital Management, Ray Chipendo, on whether the proctectionist measures were for a short or long-term strategy.

“I think that your latter point (protectionism) is correct. It is a strategy, part of a strategy. The strategy starts with where we are in terms of acknowledging simple realities like our industries at the moment are not competitive. I mean, we did our last manufacturing sector survey, which showed that companies are using equipment that is north of 20 years old in terms all the antiquated equipment so that is the reality,” he said.

Last year, government promulgated Statutory Instrument (SI) 64 of 2016, which restricts the importation of 43 products, with local equivalents stating that for one to do so, it requires an import licence, which is issued once one has satisfied authorities on the reason the products should have to be imported.

Investors have seen the measure as a form of protectionism.

SI64 caused a brief trading row with neighbouring South Africa — Zimbabwe’s biggest trading partner — who threatened retaliatory measures against the country.

The row concluded with the government being forced to make some duty concessions on 112 products provided to them by their South African counterparts.

However, SI64 did see capacity utilisation rise to 47,4% in 2016 from the previous year’s 34,3%, with more companies praising the rise.

The Industry and Commerce ministry has been on record several times calling for the need to resuscitate local industry, with the private sector saying considerations needed to be made so as not to deter investment.

International Monetary Fund country representative, Christian Beddies said at the same event that government needed to create a conducive environment for the private sector.

“Zimbabwe needs to build strong foundation on which growth can actually happen and that involves, in very simple ways, reducing the government footprint in the economy to create an environment for private players to invest and run the economy,” he said.

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