Influx of SA imports stifling Bulawayo industries

Published: 06 December 2013

Bulawayo industrialists have cried foul over Zimbabwe's over reliance on imports, arguing that uncontrolled imports, arguing that uncontrolled imports are driving the industry into deeper recession.

Speaking during a Bulawayo Business Arise (BBA) breakfast meeting in Bulawayo on Wednesday, managing director of Drummond Group of Companies, Kenneth Drummond said Zimbabwe has a relaxed import regime which has done much harm to the industry over the past 10 years.

Bulawayo industrialists have cried foul over Zimbabwe's over reliance on imports, arguing that uncontrolled imports are driving the industry into deeper recession.

Zimbabwe is a net importer of South African and Chinese products, which has grossly affected the country's current account.

Speaking during a Bulawayo Business Arise (BBA) breakfast meeting in Bulawayo on Wednesday, managing director of Drummond Group of Companies, Kenneth Drummond said Zimbabwe has a relaxed import regime which has done much harm to the industry over the past 10 years.

Drummond said the importation of basic goods from South Africa sends the wrong signal to the market that Zimbabwean producers are unable to provide goods for the local market.

"We do not have access to our own markets. The over importation of goods from other countries sends a wrong signal to the producer that there is no market for them," Drummond said.

He urged government to assist local producers in boosting local production and implored Zimbabweans to buy local products.

"If our economy could sacrifice imports, it would send the right signal to the producers," he added.

Bulawayo is one of the country's industrial hubs which were grossly affected by Zimbabwe's over dependence on South African imports, culminating in the closure of most industries.

Industrial sites that were once vibrant have suddenly become derelict monuments, while local investors are reluctant to invest due to policy uncertainties.

"The business sector has a lot of capital which is lying idle.

"Zimbabweans should not think that Foreign Direct Investments (FDI'S) are a quick solution to our problems," Drummond said, adding that Zimbabwe's economic recovery will be driven by local investors.

Participants at the meeting also deliberated on the proposal for Bulawayo as a special economic zone under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).

Peter Mugodi, a business and tax advisory expert with Ernst and Young, urged government to simplify investment deals by creating a one stop shop for foreign investors to cut red tape.

"Government should create a one stop shop for investors, where everything is done in one office to expedite the process," Mugodi said.

Special Economic Zones were successfully implemented in Shenzhen, China in 1980 and has improved the country to become the second largest economy in the world after United States of America.

The Affirmative Action Group (AAG) recently said it will petition President Robert Mugabe over a plethora of challenges besetting local businesses, particularly Bulawayo’s deindustrialisation.

AAG national president Keith Guzah indicated that they were working on creating a sectorial work organ to come up with a position paper on the problems affecting industry in Bulawayo in 14 days.

Bulawayo is the most hit by deindustrialisation after recording close to 100 company closures last year.

More companies continue to downsize and some are relocating to other cities, leaving thousands of locals unemployed.

Closure of companies in Bulawayo has largely been attributed to shortage of working capital, erratic power supplies and high operation costs largely because of antiquated machinery and the high cost of labour.

Mugabe has previously equated Bulawayo to a big scrapyard with the continued massive de-industrialisation of the city.

But the AGG, which is strongly linked to Zanu PF, said it would not allow Bulawayo - the former industrial hub of the country - to die, hence the need to petition Mugabe on the myriad of challenges local companies are facing.

Guzah said while there was need for the manufacturing industry to be revived countrywide, Bulawayo was a special case and needed urgent attention.

Bulawayo has been hit by a perennial water crisis which has seen several companies relocating.

Bulawayo businesspeople bemoan the centralisation of governance, adding that it was slowing recovery of business in Bulawayo.

They said the government should address the centralisation of service as the processing of loans and procurement was done in Harare, which was unfair for business in Bulawayo and other towns.

A Confederation of Zimbabwe Industries congress reecently resolved that Bulawayo must be urgently declared a special economic zone to attract investment to fund the recovery of industry.

Industry continues in the doldrums after capacity utilisation plunged to 39,6% from 44% recorded last year.
- dailynews