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Business Editor Prosper Ndlovu
MRS Teresa Sibanda runs a hardware stockist outlet in Bulawayo. In a competitive market environment that is characterised by low disposable income, her business survives on volume sales that fluctuate depending on demand per month. With the demise of the local manufacturing industry, she frequently crosses the border to neighbouring Botswana and South Africa to source some of her wares, which are not available locally.

“There are a lot of products we sell here which aren’t available locally. For example we import locksets, padlocks and a variety of working tools, which are not manufactured at home. “These products are on high demand and they sell very fast,” says Mrs Sibanda, a co-director at Max Hardware in the city centre.

Price is a major factor in this line of business, she says adding: “With imported products we’re able to make profit margins and get more volumes than with local products”. Mrs Sibanda says local stockists are “patriotic” citizens who support empowerment programmes and local procurement. BUT their major problem with local products is the price factor.

“There are products that we get locally such as doors, window frames and fences. But there’s little or no profit margin on these because of pricing and this affects us,” she says. “To tell the truth local products are of good quality but their price is not good. The market prefers cheap products and we cannot ignore that if we’re to survive in business.”

With the government tightening import restrictions in a bid to reduce the import bill and “protect” local industry from cheap imports, things might not be the same for the bulk of small establishments whose businesses rely on imported goods.

Widespread debate has ensued following an outcry over the issue since a pronouncement of the new measures under Statutory Instrument 64 of 2016 a week ago. A wide range of products that include furniture, potato crisps, bottled water, baked beans, salad cream, peanut butter, yoghurt, doors, window frames and a variety of plastic pipes make up the long list of products whose importation now requires special licences.

This is also set to impact heavily on big retail outlets and several stockists across sectors that rely on imports. The government prefers calling the policy “import restriction” as opposed to a ban and believes this will help narrow the trade deficit gap of about $3 billion per year and assist local manufacturers to grow.

However, Mr Chamunorwa Makombe, who also runs a similar business in the city, says the new import restriction regime will frustrate a lot of budding businesses and impact negatively on livelihoods.

“We appreciate the need to protect local industries but government should strike a balance. My business deals with paints and fittings, curtain rails and air vents, which are not available locally.

“The government should first re-align the pricing system of local products. As long as imports remain cheaper than local products, we’ll have a problem,” he said. Mr Makombe believes the government should have first consulted stakeholders on the pricing factor. To him domestic pricing is not competitive hence the penchant for imports.

“In a market economy the price rules, cheap products attract more customers. As a trader I have to satisfy that to remain in business. Most Zimbabweans earn less and if we sell expensive products, we will be out of business,” he says.

“This is our country too and we are concerned about the state of the economy”. The Confederation of Zimbabwe Industries (CZI) backed by the Buy Zimbabwe Campaign have endorsed the restriction saying this will assist the revival of local manufacturing industry, whose capacity utilisation hovers around 30 percent.

The local industry is facing numerous constraints that include ageing equipment, skills flight and lack of capital, which affects its competitiveness in the global market. Debate on import restriction spilled into Parliament last week where legislators sought clarity from Finance Minister Patrick Chinamasa on the implications of the new policy on the informal sector in particular.

Southerton MP Gift Chimanikire felt prohibiting more imports was going to affect jobs in the informal sector that rely on those products. Chinamasa in response said the new SI merely removes those (stated) items from the open general licence and that those who want to import them should apply for a licence.

“The government remains committed to supporting the informal sector, more particularly to help it to access credit, skills development and infrastructure for it to be formal,” said the minister.

“Currently, our challenges with revenue collection arise from the fact that the economy is highly informalised and it presents problems in terms of revenue collection. So, our interest as the government is to recognise that there are those SMEs and to help them establish themselves into formal businesses so that we facilitate the collection of revenue.”

Some MPs further argued that the process of obtaining import licences was cumbersome especially for women entrepreneurs. “Our women are being abused so that they can be issued with these licences. Why do we require these licences? The country is facing difficulties. Why do we have that and why were the people not consulted?” Gweru urban MP Cecil Zvidzai asked.

Chinamasa in response told the august House that the move was mainly meant to tackle the import bill which has resulted in current balance of trade deficit. “We’re importing more than we export and a lot of the hard earned foreign currency that we make is going to buy trinkets, because we were operating in an over-liberalised foreign exchange market.

“That has to stop so that we limit the usage of our hard earned foreign currency to importing only those goods, which are critical to the development of the economy,” said Chinamasa.

He urged Zimbabweans to support local companies saying a lot of items that have been removed from the open general licence are locally produced and of higher quality. Bulawayo Central MP Dorcas Sibanda also queried the wisdom of the move in light of the SADC trade protocol that supports imports and exports within member states.

Minister Chinamasa, however, said everything the government was doing was above board and in line with Sadc protocols. “We’re not barring anyone. We’re saying we require one to be licensed to import such goods. It is no longer on the general open licence. That is what we are saying,” he said.