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CZR opposes proposed textile, clothing import licensing regime

Business
CZR opposes proposed textile, clothing import licensing regime

THE Confederation of Zimbabwe Retailers (CZR) has strongly opposed a proposed textile and clothing import licensing regime, warning that the move would increase costs, disrupt supply chains and undermine the competitiveness of formal traders in the clothing sector. 

According to CZR, in May, the Industry and Commerce ministry imposed an import and export licence regime for textile and clothing items on behalf of industry players. 

The proposal comes at a time when formal clothing retailers are seeing their business collapse as the majority of consumers turn to the second-hand market owing to cheaper prices. 

“We strongly oppose the proposed import permit intervention due to the fact that it will increase costs and undermine the competitiveness of our products.  

“This proposal contradicts with the government’s ease of doing business agenda, as this introduces a bureaucratic hurdle which does not really promote business growth,” CZR president Denford Mutashu said in a statement. 

“It also brings hindrance to the operations involving international brands and promotes unfair advantage to informal traders who do not contribute to the fiscus (who will continue to smuggle goods while formal trade is encumbered with another regulation).  

“This will result in prolonged ordering cycles due to the added administrative hurdle of applying for the import licence.” 

He said there was a need for these hurdles to be addressed systematically and consistently to ensure continued viability of the cotton-to-clothing value chain. 

“Therefore, we urge the government and the other stakeholders not to destroy one facet of the value chain to assist another.  

“Instead, there should be a common ground that helps the growth of the sector,” Mutashu said. 

CZR suggested that communication should have been made to all stakeholders to give their submissions in a bid to protect the viability of the textile and clothing industry. 

“We opine that the position paper was supposed to have been a collective effort by all key stakeholders. We are concerned that several key suppliers and retailers were not involved in the May 15 discussions (which led to that May 20 position paper), despite their history of constructive engagement with these bodies on matters of national interest. 

“We are shocked that clothing retailers were not even invited to this engagement, yet a key decision which was made affects the viability of the industry.  

“We acknowledge the challenges facing the industry which include declining employment levels, rampant smuggling, high cost of production, shrinking formal sector and limited capacity in local textile manufacturing for the fashion business.” 

Research from CZR shows that clothing manufacturers are already being subjected to high taxes on cotton products (40% plus a weight-based surcharge). 

“We see no need to introduce another cumbersome import process which will hinder the ease of doing business and increase costs to the end customers and turnaround time of fabric acquisition at a time when the local manufacturing is being revived,” Mutashu said. 

He called for the promotion of partnerships between members of the Zimbabwe Textile Manufacturers Association, Zimbabwe Clothing Manufacturers Association and retailers to ensure alignment to customer needs and a consolidated response to Zimbabwe’s financial and market dynamics. 

This includes the sharing of information on demand and market trends. 

Mutashu also called on the government to continue capacitating the whole value chain through the implementation of fiscal incentives to attract investment and promotion of partnerships between local investors and foreign capital. 

“Multi-sectorial engagements like the one held on May 15 should be encouraged,” he added. 

“We, however, submit that such engagements should involve all key players in the clothing value chain (including retailers).  

“Such meetings may be held quarterly, bi-annually or annually.” 

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