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THE Confederation of Zimbabwe Industries has welcomed the Mid-term Fiscal Policy Review Statement, saying it will promote both the production and consumption of local products.

CZI president Busisa Moyo told a press briefing in Harare that the mid-term fiscal policy review statement was going to create a conducive environment for businesses around the country.

Finance Minister Patrick Chinamasa gave a bold mid-year fiscal policy review statement last Thursday in which he highlighted a number of cost containment measures and strategies towards consolidating domestic economic growth.

He demonstrated the government’s appreciation of the barriers to sound progress and affirmed its commitment to bringing in a new dispensation towards the successful implementation of the Zimbabwe Agenda for Sustainable Economic Transformation, (Zim-Asset).

Slashing the bloated civil service wage bill and protecting and capacitating local industries, were the major highlights of the minister’s presentation.

Moyo said the policy would help reduce the importation of foreign products, which continue to pose a major threat to local firms.

“The pro-industry policy is supporting local industries, it’s consistent with what we’ve been discussing with our Ministry of Finance. We made a submission as you’re aware in that mid-term fiscal policy review and we’re glad to say the majority of what we contributed was adopted and in some instances adopted further than what we thought it would be.

“The fiscal policy has been well received by business and business will play its part to ensure that we reciprocate the government’s move to protect local business,” he said.

Moyo added that CZI would implement several strategies for industrial growth, which will be dealt with during the coming year.

“We’re unveiling the official state of resolution by the end of the week, however, those resolutions are being finalised. We’re going to continue working on value change as we mentioned earlier on at the beginning of the year,” he said.

The 2015 mid-term fiscal policy review statement has announced a number of developments aimed at improving business conditions in the country such as the ban on importation of secondhand products and the raising of tax on different products.

Moyo also said, for instance, local industry would work to boost cooking oil production in the country to meet demand.

“Zimbabwe consumes 11,500 metric tonnes of cooking oil every month and the country has the capacity to produce 10,500 metric tonnes every month and we’re working on measures to cover that gap,” he said.

Moyo added that the ban on imports would run for 36 to 48 months, which would allow the country to recover.

“The policies in the fiscal policy will allow companies to be competitive,” he said.

Chinamasa stressed the need to expedite labour law reforms in the context of rampant job losses in the private sector following the recent Supreme Court ruling.

He said labour laws would be reviewed with a view to protecting the rights of both the employee and the employer while at the same time ensuring continued survival and viability of businesses.

The minister said the loopholes in the current legislation had created imbalances that have brought negative implications on the economy.

He noted how the labour cost burden had led to the demise of giant parastatals such as Ziscosteel (NewZimSteel) which has accrued payroll liabilities of over $131.5 million in the five years it has not been operational.

Air Zimbabwe has salary arrears amounting to $136.4 million while the National Railways of Zimbabwe is at $140.1 million and GMB $20 million.

Economists have cited such scenarios as barriers that make local companies unattractive to any potential investor or strategic partner.

The minister increased surtax on imported second hand vehicles of five years and older to 35 percent from 25 percent in a bid to protect local car assemblers and contain the growing import bill at $3 billion since January.

He announced a cocktail of measures to protect local industry, which include a power tariff relief for businesses, a ban on second hand clothes starting September 1 and the scrapping of rebate on imported basic goods that can be produced locally from August 1.

The minister also removed from the travellers rebate such grocery items as maize-meal, meat, sugar and flour.

Among the growth enhancing measures is the $3 million facility for SMEs and $5 million seed money towards the setting up of a Women’s Bank. — Harare Bureau/Business Reporter