EDITORIAL COMMENT: Import controls paying dividends Emmerson Mnangagwa
VP Mnangagwa

VP Mnangagwa

Restrictions that the Government has imposed on imported products, starting in 2014 with respect to cooking oil followed by an expanded list that took effect in June were opposed in some circles but their benefits are now self-evident.

D’Lite, SunStar and Sunfoil dominated local supermarket shelves for about a decade as local manufacturers faced a range of challenges but in January 2014 the government increased import duty on cooking oil, margarine, soap tablets and bars and washing powder, sugar, poultry, milk, vegetables, cement and plastic bags from 10 to 40 percent.

Statutory Instrument 64 of 2016 became a huge story when it was gazetted on June 17, even sparking violent demonstrations in Chitungwiza and Beitbridge where a warehouse and vehicles were torched. The SI imposes restrictions on the importation of dozens of products, among them Cremora, Camphor creams, baked beans, bottled water, cereals, certain cotton fabrics, fertilisers, petroleum jellies, iron and steel building materials and fittings.

Alarmists and the opposition warned of possible shortages of the products, particularly the basics, attacking the Government for seeking to protect a manufacturing sector “that does not exist.”

Such baseless criticism from the opposition actually discredits them as it is criticism for criticism’s sake even when the Government is genuinely working to revive manufacturing and the wider economy.

A country such as ours which has a strong manufacturing base cannot afford to resign itself to the position of a supermarket economy for foreign products.

It is now clear that the criticism was unfounded because milk processors, oil manufacturers, farmers, petroleum jelly and Camphor cream producers have increased production for markets that were once dominated by South African producers.

By May this year, 95 percent of the cooking oil that was on supermarket shelves across the country was made locally from 15 percent prior to the restrictions two years ago, according to the Oil Expressers Association of Zimbabwe.  Milk processor, Dairibord Zimbabwe Private Limited said last week that it was investing up to $6 million in plants to manufacture maheu and long life milk.

The Confederation of Zimbabwe Industries reported this week that demand for locally manufactured products has risen by an average 30 percent since the implementation of SI 64 in June.  CZI president Mr Busisa Moyo hailed the controls for helping revive local industry, adding the organisation was conducting a study to evaluate the impact of SI 64.

On Wednesday, Acting President Emmerson Mnangagwa toured two oil manufacturing plants in Harare — Wilmar Surface and Pure Oil Industries.  The former makes Pure Drop and Golden Glow cooking oil while the latter makes Zimgold cooking oil.

“This has shown that our Ministry of Industry, Trade and Commerce made correct recommendations to the Government and as a result of that we are now producing cooking oil in Zimbabwe,” he said.

“I am advised that currently the two plants we have visited are producing domestic supplies and this has reduced our import bill and that is how we must go.”

Across the country in Mutare, the South African company Willowton, that gave us D’Lite in large amounts before the restrictions took effect in 2014 has completed the construction of a $40 million cooking oil plant, with production expected to begin in the next two months.

The investment has 100 direct jobs. Apart from D’Lite, the plant would manufacture margarines and spreads, toiletries, laundry and bathing soaps, candles, chocolates, baking and industrial fats.

We look forward to growth in capacity utilisation for local manufacturers of items like door frames, cereals, certain cotton fabrics, fertilisers, petroleum jellies, iron and steel building materials and fittings as well since the restrictions have created a bigger market for them.

We therefore hail the Government’s foresight and commitment to creating conditions for local industry to recover and grow amid strong opposition.  Local manufacturers have proved that the negative sentiments that came after the measures were misguided.

While we are happy with the improvements in the edible oils sector, for instance, we also note that the recovery has just been on one part of the value chain, minus farmers who grow the raw materials — soya beans and cotton seed.

Manufacturers have made the point about this missing link and, to correct that, they have rolled out a plan to invest $200 million in contract schemes to boost the growing of soya beans and cotton seed.  That is encouraging.

A lot is also happening in the dairy sector where processors such as Dairibord, Dendairy and Alpha Omega, working with the Government, are importing heifers to improve raw milk output.

But one area of concern where the Government has controls in place that appear to have been ineffective is on the importation of used clothes.

Despite the presence of a government ban on these items, we see loads of them on the streets in towns and cities countrywide, proof that the used clothes are being smuggled.

More diligent policing to prevent smuggling as well as confiscation of the items wherever they are found can help in recovering the clothing and textiles sector, the same way controls and robust policing have stimulated the recovery and growth of the cooking oil and milk processing sectors.

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