Harare firm on import ban - for now

17 July 2016 - 02:00 By RAY NDLOVU

Zimbabwe is not out to spark a trade war with South Africa - its largest trading partner - let alone with other countries in the southern African region, but will also not back down on a newly implemented policy that restricts the influx of imports across its borders.Zimbabwe's industry and commerce minister, Mike Bimha, said this week that the policy would remain in place, as this was in the best interests of the country, which was trying to revive its nearly defunct manufacturing sector."We don't come up with policies on the basis of fear or on what other countries will do to us. We have come up with measures necessary for Zimbabwe to retool," he told Business Times in an interview.A survey by the Confederation of Zimbabwe Industries estimates that nearly 65% of the country's industries lie idle. A lack of capital, competition from cheap imports mainly from South Africa and power shortages are some of the challenges they grapples with.Of the imports into Zimbabwe in the first quarter, 35.8% came from South Africa, according to the latest figures from the Reserve Bank of Zimbabwe.Singapore accounted for 24.7%, China 9.5%, Zambia 5%, Mozambique 3.5% and Japan 3.5%, the bank said.The latest refusal to stand down on Statutory Instrument 64 of 2016 by authorities in Zimbabwe could scupper the engagement efforts sought by Pretoria with Harare over the import restrictions.Independent estimates place losses for South African businesses in the border town of Musina, Limpopo, at nearly R100-million in revenue so far, as cross-border traders from the neighbouring town of Beitbridge buckle under the import restrictions, which came into effect this month.The new law, among other things, restricts the import of cosmetics, cereals, coffee creamer, mayonnaise, cheese, canned fruits and vegetables, second-hand tyres, iron and steel products, furniture and woven cotton fabrics.Anyone intending to import these products into Zimbabwe must first apply for an import licence from the ministry, which costs $30 (about R430).The importer must also prove beyond doubt that the products are either unavailable or were in short supply in the country.Bimha said the import restrictions were "time-bound" - set to last for six months, after which the ministry would reviewprogress.However, South Africa's Department of Trade and Industry said it was concerned by Zimbabwe's increasing protectionist policies, whose "adverse impact on South African exporters cannot be underestimated".Department spokesman Sidwell Medupe said it was concerned by the range of trade-restrictive measures that the government of Zimbabwe had introduced."These measures include import bans, surcharges, increases in import duties, requirements for import permits and other forms of restrictions that have negative implications on intraregional trade," he said.Some industrialists and businesses in Zimbabwe are in favour of staggered increments - increasing the duty of goods slowly to discourage imports and subtly force people to buy goods that are locally produced.Economists expect the import restrictions to have an effect on the coffers of the cash-strapped government, which has enjoyed steady inflows of revenue from duty payments.An increase in import duty for second-hand vehicle imports from South Africa, Japan, Germany, UK and Germany has already affected the state's coffers.It was introduced last year with the intention to boost local production in the motor vehicle industry.The Zimbabwe National Statistics Agency said last month that second-hand car imports into Zimbabwe had fallen by 25% and revenue collections had declined to $250-million in the first half of 2016, compared to the $365-million earned in the same period in 2015.The agency cited high import-duty tariffs and liquidity challenges as the major reasons for the decline.Bimha said it was wrong to imagine that Zimbabwe was closing its borders on South Africa.Nearly 78% of Zimbabwe's exports, the bulk of which are platinum, gold, tobacco and nickel, go to its neighbour south of the Limpopo River."We don't import from South Africa alone, we import from all over the show. We have not banned, we have just [introduced] restrictions as we are importing more than we are exporting."That list of [import restrictions] is actually only a fraction of what we import from South Africa. The trade balance remains skewed in their favour."Bimha said he was looking forward to a meeting with South African Trade and Industry Minister Rob Davies to explain Zimbabwe's position .He said a standing technical committee on trade, which has representatives from the two countries, was already involved in "routine meetings" and engagements.Although a formal meeting was yet to be set between Davies and Bimha, Bimha said he would try to use the 14th session of the UN Conference on Trade and Development in Kenya, starting today, to talk with his South African counterpart. "It all depends on the schedules ... if we don't manage to speak , I will have to go to South Africa or Davies will have to come to Zimbabwe," he said.Bimha said retaliations were not in the best interests of either country and discussions were the best way to proceed."For instance, South Africa has a policy that requires that all pharmaceuticals coming in be airlifted via OR Tambo airport. That is very expensive for us, but we have gone with that."We allow [South Africa's] pharmaceuticals to come through via Beitbridge border - and have not retaliated by insisting that they use air as well. Because of the proximity of the two countries, we have to engage with each other," he said.rayzr21@gmail.com..

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