Home » Business » ’15PC Tax On Platinum Disincentive for Raw Exports’ [opinion]

GOVERNMENT introduced taxation on raw platinum and banned export of unprocessed chrome to enforce beneficiation and value addition to the country’s natural resources in a bid to ensure industrialisation, increased revenue, job creation, skills and technology transfer, a senior Government official has said.Zimbabwe levies a 15 percent tax on raw platinum exports, which miners claim is compromising viability while the Government has also banned the export of unbeneficiated chrome.

Secretary for Finance Mr Willard Manungo made the remarks in his opening address to the 21st session of the United Nations Economic Commission for Southern Africa Intergovernmental committee of experts meeting at Kingdom Hotel yesterday, stressing that Zimbabwe and Africa cannot afford to continue exporting value, income and jobs through raw exports.

The ICE for Southern Africa meeting, which ends in the resort town today, is being held under the theme “Accelerating Industrialisation in Southern Africa through Industrialisation and Beneficiation”.

This follows a directive by SADC heads of State last year that the SADC secretariat should develop a strategy and roadmap for accelerated industrialisation of the region. Mr Manungo said that Zimbabwe in particular and the African continent in general faced serious socio-economic challenges, which had been worsened by experiences of the last three years emanating from the instabilities of an unfavourable global economic environment.

The challenges included low growth, few jobs, vulnerability to global economic instability shocks, pervasive poverty and widespread socio-economic inequalities in all the African countries.

“We cannot continue to export value, export income and jobs. President Mugabe, who is chair of SADC and African Union at the SADC Heads of State Summit here in Victoria Falls urged African countries to industrialise . . . Africa is the biggest donor in the world,” Mr Manungo said.

He said in line with the drive to industrialise and beneficiate natural resources, Zimbabwe was playing its part to aance SADC’s thrust to maximise returns from its abundant natural resources through value addition and beneficiation of minerals and agricultural produce.

In keeping with the mandate assigned by the continental, regional and national leaders, Mr Manungo said through industrialisation, value addition and beneficiation Africa would cushion itself from vulnerabilities associated with external developments such as decline in commodity prices.

He said Africa would ensure more meaningful jobs and move away from its reputation as a producer of primary commodities, something Zimbabwe was countering through value addition and beneficiation cluster of the Zimbabwe Agenda for Sustainable Socioeconomic Transformation.

Economic Commission for Southern Africa sub-regional office director Mr Said Adejumobi said while the question outside Africa was why it should industrialise when it was suited for raw exports, the guise of the theory of comparative aantage, “we do know that comparative aantage is never static. Today’s primary producers can become tomorrow’s industrial societies.

“The rhythm of industrialisation is not restricted to Africa (alone) it is a song that other parts of the world are also singing. In Europe, for example, the new song is about re-industrialisation, especially with the ongoing economic decline in some parts of Europe,” Mr Adejumobi said.

He said while Africa should celebrate the impressive economic growth in a number of countries on the continent, it should do so with caution and care as the growth was powered by boom in primary products, which was weak, vulnerable and possibly reversible and leave Africa exposed.

As such, in its quest to industrialise and cognisant of serious challenges elsewhere in Africa, it was encouraging to note that it was not all doom and gloom in all countries as there were pockets of success such as in Botswana’s diamond industry and South Africa’s wine industry.

For Zimbabwe, the thrust towards value addition and beneficiation of primary products was fully provisioned in the country’s industrialisation development policy, which seeks to transform Zimbabwe from its comparative aantage in raw exports into industrial hub with competitive aantage.

To that end, the Government has already identified potential quick wins such as agro-processing, pharmaceutical, diamond cutting and polishing, tourism and platinum beneficiation among many others.

In respect of minerals, Mr Manungo said that Government had introduced the 15 percent export levy on exports of unbeneficiated platinum since January to compel the producers to set a refinery while a ban had been effected on the export of unbeneficiated chrome for the same reason.

“We do not believe that we should be restricted to digging up the minerals and loading them on to the train for processing elsewhere,” he said.

Zimbabwe sends its raw platinum for processing in South Africa and Government suspects it is losing billions in potential value added revenue.

He said there were significant potential benefits from downstream value chains the country was not realising.

However, he pointed out that it was important that Africa and the region moved with haste to address infrastructure bottlenecks such as energy, transport and ICTs to enable regional integration and intra-regional trade to cushion Africa from shocks of global instability.

Source : The Herald

Archives