EDITORIAL COMMENT: New procurement policy commendable

Busisa Moyo

Busisa Moyo

Statutory Instrument 64 of 2016 (SI 64/2016) which was crafted by the Government had a positive effect of stimulating domestic productivity. It also encouraged consumption of locally produced products.

The noble idea behind the policy was to protect local manufacturing industries against foreign companies “which were enjoying competitive advantage owing to low production costs in the countries of origin as compared to the local macro-business environment.”

To some extent, the new law borrowed from protectionism. Economics say “protectionism is the government’s actions and policies that restrict or restrain international trade, often done with the purpose of protecting local businesses and jobs from foreign competition. Classic methods of protectionism are import tariffs, subsidies, quotas and direct state intervention. An advantage of protectionism is that it keeps the domestic economy rolling. Since there is a decrease in imports, domestic firms have less competition, and so are able to continue.

The domestic economy will also be strengthened because unemployment will be down due to the domestic firms and they will be able to produce and sell more goods with a lot less difficulty, giving firms less reason to decrease costs by decreasing the workforce. Those with jobs will continue to consume while allowing the economy to flow.”

Moreover, a number of local companies have attested to improved business after the Government intervention, recording a steady growth in business and profits.

It is in the same vein that we believe the Industry and Commerce Ministry should be commended for coming up with policies that seek to reignite the fire in local industries. After last year’s intervention, the ministry has announced the Public Procurement and Disposal of Public Asset Policy, which is another tool to recapitalise and re-energise local industry.

We say this because captains of industry have said the Public Procurement and Disposal of Public Asset Policy will promote local procurement of goods as well as curb underhand dealings in the acquisition of assets by Government and its various departments.

The Public Procurement and Disposal of Public Asset Bill sailed through the committee stage in the National Assembly recently and is now before the Parliamentary Legal Committee to check for its constitutionality.

The Bill would ensure that evaluation of bids by procuring entities gives preference to bids from Zimbabwean or local suppliers and manufacturers. The Bill is also expected to ease the extent to which Zimbabwean or local suppliers and manufacturers participate in the supply of goods, and construction works and services in accordance with provisions in the Indigenisation and Economic Empowerment Act.

“Public Procurement and Disposal of Public Assets should have minimum local content rules from a national as well as from regional or community perspective, for example, a Bulawayo wholesaler must purchase a certain percentage from within Bulawayo to attract industry and employment to the city,” said Confederation of Zimbabwe Industries president Mr Busisa Moyo.

We believe the new piece of legislation will also curb the unnecessarily importation of goods that can be sourced locally.

Such policies, though having their own critics or shortcomings, are ideal for the situation that the country finds itself in, and in its endeavour to resuscitate local industries and create employment.

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