Sikhumbuzo Moyo, Senior Reporter
Government has suspended with immediate effect and for the next six months, import duty on basic commodities in a move meant to counter escalating and unjustified price increases of locally manufactured products.
There has been unjustified increases in the prices of goods and services in recent weeks, mostly being pegged using forex black market rates as the benchmark.
The parallel market activities have fuelled the depreciation of the local currency and inflationary pressures.
In June last year inflation was at 50,1 percent, a record low in two years, but climbed to 96,4 in April from 74,6 percent in March amid the exchange rate volatility.
To cushion consumers, rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, Tea (whether or not flavoured), petroleum jelly, tooth paste, bath soap, laundry bar, and washing powder will now be imported duty free.
The Ministry of Finance and Development permanent secretary Mr George Guvamatanga announced the measure in a memo addressed to the Zimbabwe Revenue Authority (Zimra) acting Commissioner-General Ms Regina Chinamasa.
Mr Guvamatanga said the import duty suspension was aimed at ensuring access to affordable basic commodities following a recent substantial increase in prices of locally manufactured products.
“Reference is made to the press statement by the Minister of Finance and Economic Development where a pronouncement was made regarding the introduction of measures aimed at ensuring access to affordable basic commodities, in view of the recent substantial increases in prices of locally manufactured products. In view of the above, Zimbabwe Revenue Authority is hereby authorised to suspend duty on the following products for a period of six months with effect from May 17, 2022,” reads the memo.
Zimra was also requested to urgently draft the necessary legal instrument and implement the duty suspension which should coincide with gazetting of the relevant legislation.
“Furthermore, the Ministry of Industry and Commerce is expected to complement the measure through the inclusion of the above goods on the Open General Import Licence,” read the memo.
The Consumer Council of Zimbabwe and Confederation of Zimbabwe Retailers said the move was a welcome development as the continued increase of basic commodity prices was making life unbearable for ordinary Zimbabweans.
CCZ called on the Government to consider adding school uniforms, electrical goods, hardware, and cement to the list of goods not attracting import duty.
CCZ spokesperson Mr Christopher Kamba said imported goods will create much-needed competition on both the price and quality of goods. He urged the relevant standard watchdogs to be vigilant at the ports of entry to ensure local and imported goods meet the required health and safety standards.
“In times of crisis like this where consumers start experiencing shortages of basic commodities and price hikes, duty-free imports are welcome as they will alleviate the plight of consumers. Imported goods will create much-needed competition on both price and also quality.
“As CCZ we urge the relevant National Quality players to be active at the ports of entry to ensure both the local and imported goods meet the required health and safety standards. Consumers must be protected from monopolies and cartels because they raise prices and sometimes quality standards are also compromised,” said Mr Kamba.
He said shortages and price hikes bring the worst consumer experience and as much as possible they should never be left to carry on.
“Local production is very important and should always be promoted. But it’s protection should not bring hunger to the consumer. Local production should not bring poverty to the consumer,” said Mr Kamba.
CZR president Mr Denford Mutashu said there is a need to give back consumers their buying power and the power.
He said the import duty ban will increase the availability of basic commodities across the economy.
“The move by the Government of Zimbabwe to scrap import duties on key basic commodities is a welcome development, especially for the ordinary poor. The escalation of prices for locally manufactured commodities had made it unbearable and quite difficult for the general public to access basic goods and services across the economy. My wish is that the Government extends the measures to uniforms, stationery, hardware, electrical goods, and cement among other critical goods so that we can reduce the general costs of access to key basic commodities,” he said.
“There is a need to give back to the consumers their buying power and the power to hold prices down. The move will increase the availability of general key basic commodities across the economy and when supply outstrips demand, the market forces will kick in and ensure that there is general price stabilization across the economy.”
Mr Mutashu said while it is inevitable that manufacturers will frown over the move to scrap duty on basic commodities, they left the Government with no option.
“I am sure manufacturers and local businesses will cry foul but remember, the move by Government to extend restrictive measures to ban imports was meant to give industry sufficient time to retool and ensure they become competitive and in the wake of the Africa Continental Free Trade Area. It is feasible and important that local companies embrace digitalisation, new technologies and ensure they are ready to compete not only within Comesa and Sadc countries but the rest of the world,” said Mr Mutashu.
“In any case we need to gear up and ensure that our institutions are actually compliant. Going forward it is also something that is worrying that the President announced some measures to contain the parallel market exchange rate pressures, and inflationary pressures, we saw a number of retrogressive reactions across the economy as if to say His Excellency President Mnangagwa should not ultimately make such key decisions that impact positively on the generality of Zimbabweans. We would like to ensure that the environment obtains sanity, we contain the parallel market exchange rate and we flood the market with key basics which are affordable.”