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Minister Mike Bimha

Prosper Ndlovu, Business Editor
INDUSTRY and Commerce Minister Dr Mike Bimha says the private sector should take advantage of Statutory Instrument 64 of 2016 to improve production efficiency and reduce prices of their products to achieve competitiveness.

Cheap imports continue to be a major threat to domestic industry viability and contribute to the widening trade deficit estimated at $3 billion annually, according to Zimstat.

Some unscrupulous businesses have started increasing prices of goods and services despite the strengthening of the United States dollar thereby giving room for more imports and smuggling.

Minister Bimha told a business gathering during the commissioning of Turnall Holding’s new Eco-sheet product in Bulawayo last Thursday that protectionist measures such as Statutory Instrument (SI) 64 were not sustainable in the long term.

The Government introduced SI 64 in June this year to curb the influx of a range of products that are manufactured locally as part of measures to boost domestic production and save jobs.

“We are saying to you as manufacturers, the Government is supporting you but you also need to play your part, you need to up your game, you need to improve on quality and distribution. You also have to bring your prices down by increasing your efficiency,” said Dr Bimha.

“Those companies that are benefiting from SI 64, we would want you during this temporary period to re-equip or retool, so that when competition comes, you will be producing enough of high quality. But to do so a number of companies require funding and we are saying those firms that benefited but require funding to re-tool please come to us. There is funding for those companies that benefited from SI 64. So, it’s entirely up to you to take up this offer.”

The minister said feedback from the private sector was already indicating that the intervention by the Government was impacting positively on domestic production.

“When we introduced the first SI in 2015, which was targeted at a few products including cooking oil, we discovered that in a very short space of time the production had gone up, capacity utilisation had gone up.

“But more importantly some of those companies which were exporting cooking oil to Zimbabwe came to Zimbabwe to set up new factories to produce the product that they were exporting, therefore creating employment in Zimbabwe,” said Dr Bimha.

He explained that it was in this context that Government brought SI 64 of 2016 to give broader support to a number of products.

The protectionist instrument has, however, attracted widespread criticism from pessimists who accuse the Government of being insensitive to those affected.

Captains of industry have already applauded the legal instrument and the Confederation of Zimbabwe Industries (CZI) will this week present an outcome of its capacity utilisation survey for the year, which will factor the effect of SI 64.

“But we now see the fruits of SI 64 as evidenced by the feedback we are getting from manufacturers. SI 64 is not the end in itself to us. It’s just the beginning of a road to rescuscitate our industry. We will continue to bring other measures that will support local production,” said Dr Bimha.

He said the Government was also working closely with CZI, Buy Zimbabwe, ZNCC and other business organisations to look at the possibility of a robust policy on local procurement.

The minister said if all Zimbabweans were committed to buying local and buying products that are made in this country, there would be no need for SI 64 or any protectionist measure.

He emphasised that the SI 64 alone would not yield positive results without input from companies. Instead, he challenged firms to be pro-active by coming up with solutions and only seek’s Government hand in creating an enabling environment.

“So it’s not just something you get for nothing. We also demand you to play your part. But more importantly it’s not Government that comes up with solutions. It is up to you who are the people on the ground to come to Government and say here are the solutions,” said Dr Bimha.

“I don’t want companies that come to us and say we have this problem can you as Government help us, I want you to come and say we have these problems but we suggest these solutions, then it’s easier for me to take these solutions to Cabinet to say let’s resolve this. You are the people on the ground who know better than the Government, so bring the solutions.”