EDITORIAL COMMENT: Prioritise growth of local industry in 2017

Minister Mike Bimha

Minister Mike Bimha

THE Ministry of Industry and Commerce is holding its 2017 strategic planning workshop in Kariba where it is reviewing its performance in 2016 and fine-tuning strategies for this year. The meeting comes against the backdrop of giant strides made in resuscitating the manufacturing sector anchored on promulgation of Statutory Instrument 64 which imposed a ban on the importation of certain products which are available on the local market.

Nearly a tenth of local manufacturers last year saw capacity utilisation reaching 100 percent on the back of import restrictions by government. According to the Manufacturing Sector Survey 2016 report, seven percent of the companies reported full capacities. Chloride Zimbabwe, a unit of Zimbabwe Stock Exchange-listed Art Corporation, is one such company which attained 100 percent capacity utilisation after benefiting from SI 20 of 2016 that restricted the importation of batteries.

Before the restrictions, Chloride Zimbabwe was operating at 64 percent capacity utilisation and was supplying 15 000 batteries per month into the market.

“It took three months to get to full capacity. We are now supplying 20 000 batteries into the market and exporting to Zambia, Malawi and the Democratic Republic of Congo,” Art Corporation group CEO Tapiwa Ameer was quoted as saying recently.

As a result of increased capacity, Art Corporation invested $3 million into new battery making machinery, which was commissioned towards the end of last year. Government has promulgated a number of regulations to protect local industries. These include Statutory Instruments (SI) 6 and 126 of 2014, SI 18, 19, 20 and SI 64 of 2016, which restricted the importation of 43 products. SI 6 of 2014 regulated imported sugar, poultry and pork.

SI 126 of 2014 restricts the importation of liquid or powdered milk, potatoes, tomatoes, onions, biscuits, yeast, cement, soap and soap preparations, plastic bags of polymers, tubes, pipes, conveyor belts and rubber hoses. SI 18 of 2016 listed several pharmaceutical medicines while SI 19 of 2016 listed second-hand clothing, shoes, and blankets. SI 20 of 2016 listed specific kinds of batteries, candles, floor polish and tobacco twine. SI 64 of 2016 restricted the importation of 43 products that include yoghurts, flavoured milks and dairy juice blends, among others.

Other companies that enjoyed increments include Schweppes who benefited from SI 64 of 2016, which restricted the importation of bottled water.

Dairibord also increased capacity due to the import limitation of coffee creamers, peanut butter, powdered milk, maheu, dairy juice blends, ice creams and cultured milk and cheese. As a result, the dairy company has managed to slightly grow its market share. Cooking oil has been an amazing success story with United Refineries and other producers managing to fully meet market demands.

However, despite the success of import restrictions, there still remains areas of deficit where local industry has been unable to satisfy the market. It is against this background that the Government should be commended for being proactive and relaxing some of its restrictions.

Government had relaxed its position on the importation of second hand clothes to allow for the resuscitation and reorganisation of the textile and clothing industry.

In an interview on the sidelines of the Ministry of Industry and Commerce 2017 strategic planning workshop in Kariba on Wednesday, Minister Mike Bimha said the policy on banning second hand clothes was there, but cannot be enforced at present. “It’s a policy that was made with the hope that when we begin to enforce it, we will have improved local production. We cannot ban something when we do not have an alternative. People need to have an alternative if we are to say you cannot bring in clothes,” he said.

“We can only enforce when we believe that we have the capacity to make more or less the same as what we are importing. If we can’t, we might as well continue importing.”

He said Government now has to revisit the textile and clothing industry to ramp production so that it is able to make quality clothes at reasonable prices.

Minister Bimha said there is a drive to turn cotton into clothing, which hinges on the resuscitation to textile companies such as David Whitehead.

We agree with the Minister and urge Government to continue supporting cotton farmers so that they produce for local industries. We also call for priority to be given to the textile sector which needs major investment.

Companies such as Merlin and David Whitehead need to be assisted to retool and acquire the latest technology so that they can compete on an equal footing with cheap imports. In the interim, we commend the Government for allowing dealers in second hand clothing to continue their business as they are providing a service which is commensurate with the prevailing tough economic conditions. Low income earners will heave a sigh of relief as                 they rely on flea markets and clothes sold on sidewalks.

 

Article Source: The Chronicle