‘Embrace local content policy to reduce imports’

Confederation of Zimbabwe Industries president, Sifelani Jabangwe

HARARE – The Local Content Steering Committee has called upon different sectors of the economy to embrace policies that promote domestic procurement to curb imports and assist growth of local businesses.

By Oliver Kazunga

Since the liberalisation of the economy in February 2009, Zimbabwe has been battling to contain a negative trade balance that was largely anchored on consumer goods largely being imported from outside the country. It is in this context that the Government has promulgated policies that seek to promote local procurement in order to reduce the country’s import bill, which hovers around estimated US$2 billion per year. Such initiatives include the local content policy, which seeks to promote increased domestic production with focus on value addition.

Industrialist and Local Content Steering Committee chairman, Sifelani Jabangwe, said in order for growth and development of the domestic industries to improve, the local content policy should be implemented across all economic sectors. He said this would also go a long way in curbing the huge import bill Zimbabwe was experiencing.

“As a committee under the Ministry of Industry and Commerce, we continue to make a clarion call on different economic sectors to prioritise local procurement,” he said. “This will go a long way in curbing, if not circumventing imports as well as putting unnecessary pressure on the Reserve Bank forex auction system,” said Jabangwe, who is also the Confederation of Zimbabwe Industries past president.

He said reducing imports through implementation of the local content policy also fosters the industrialisation agenda as enunciated in the National Development Strategy 1 (NDS 1). Jabangwe said his committee has noted of late that the infrastructural development sub-sector of the country was largely leading the economy in terms of promoting domestic procurement of locally produced goods.

According to a recent survey by the Chamber of Mines of Zimbabwe (CoMZ), 70 percent of the mining consumables were being produced locally.

“Of the inputs produced locally, 22 percent were procured locally. Many suppliers cited low uptake of local products and huge preference for foreign products as major hinderance to improved local content,” it said.

“On the other hand, areas of major concern expressed by the majority of mining companies are related to the uncompetitive prices charged by local suppliers.”

Commenting on the concern raised by the CoMz, Jabangwe said the challenge was partially to do with the exchange rate distortions.

“This is why we are clamouring for a market determined exchange rate so that it can close the gap between what we are seeing on the auction rate and what we are seeing on the so-called black market and then more supplies for foreign currency will be directed towards the auction rate so that we all work using the same exchange rate,” he said. 

Source: Business Weekly