Home » Governance » Govt Approves New Measures to Protect Producers

GOVERNMENT has approved measures to support local producers by setting up a new Standards Regulatory Authority to regulate the quality of locally produced and imported goods, a senior official has said.

The Minister of Industry and Commerce Mike Bimha said in an interview that Government had also approved a new Consumer Protection Act which seeks to set recourse to law for consumers.

The measures come at a time when local manufacturers have lobbied Government for protection through prohibitive taxes and a regulatory framework to discourage importation of locally available products.

“At the moment we have a Standards Association of Zimbabwe which sets standards but does not have powers to enforce. Last Tuesday Cabinet approved the principles for a regulatory authority for imported products in terms of quality, price, health and safety,” said Minister Bimha.

“We want to support local industry by ensuring that they get imported raw materials at zero or reduced duty so that we assist to reduce production costs,” he said.

Government has removed a number of items from the Open General Import License regime introducing import licenses which can only be issued after satisfaction that such products are not locally available in the right quantities and quality.

“That will make our local producers competitive on the international market. We apply duty to some imported products which we can produce locally as Government and within the constraints of the agreements we have with other countries.

“But we do not want to over-protect our industry so that they sit on their laurels and produce low quality goods,” said Minister Bimha.

Battery, oil, fats and textile manufacturers have been the hardest hit with cheap imports with most of the products originating outside the SADC free trade area but attracting reduced duty when they should be subject to prohibitive import rates.

The manufacturers have approached Government through the Ministry and Commerce and Parliament through the Portfolio committee on Budget and Finance.

For instance, the Battery Manufacturers Association said batteries, particularly fully sealed maintenance free with bolt-on terminals imported into Zimbabwe as being of South African origin when in fact there are no South African manufacturers that produce that type of battery. Such batteries should be subject to 60 percent duty and not the current 30 percent duty. The volume of automotive battery units imported has increased to 80 876 from 53 262 in 2009 batteries in 2013 a 51,8 percent growth over the 4 year period.

The BMA said the disparity between the duty rates applicable to tariff automotive batteries and deep cycle batteries has the potential to completely undermine local manufacturers who will be forced to compete on an uneven playing field.

On the other hand oil manufacturers said South Africa produces 40 percent of its local demand with balance covered through imports from Malaysia, Brazil and Argentina.

South Africa imports palm oil and palm derivatives from Malaysia, soya bean oil and sunflower oil from Brazil and Argentina to supplement their requirements.

“Clearly all exports to Zimbabwe do not qualify under the SADC Certificate of Origin rule therefore should pay duty under the general import protocol which has higher duties than SADC protocol,” the producers report to the Minister of Industry and Commerce said.

A research trip to South Africa last year reported that all margarines and bakers’ fats are made out of palm oil and palm derivatives like palm oil imported from Malaysia. Flavours and emulsifiers are all imported from Europe. The imported content constitutes over 85 percent of the product value therefore all margarines and bakers’ fats from South Africa cannot qualify to be imported into Zimbabwe under the SADC Certificate of Origin protocol.

Source : The Herald