The Government might soon reintroduce a policy that compels line ministries, departments and State institutions to procure certain types of vehicles only from local producers to aid industrial recovery and growth.
A similar policy position was introduced through a Cabinet Circular number 16 of 2011, issued by the Office of the President and Cabinet (OPC), but registered little success as the directive was largely ignored.
Finance and Economic Development Mthuli Ncube, in an interview with Zimpapers television channel ZTN last week, said the new thrust was aimed at supporting industry under the National Development Strategy (NDS1) 2021-25, the Government’s new economic blueprint.
And the new policy framework has an effective implementation matrix already in place, while the OPC will be responsible for monitoring and evaluation of policy prescriptions to ensure targets are achieved on time and to budget.
The policy blueprint also intends to roll out strategies to increase local production of buses and delivery trucks, which will benefit upstream industries that produce inputs such as bolts, batteries, steel sheets, tyres, upholstery, paints, and carpets among others.
Apart from helping drive domestic industrial recovery and growth, the policy initiatives will also align the country with requirements of the African Continental Free Trade Areas (AfCTA) of a threshold of 35 percent local content for products from members of the trade block.
“In addition to local production of buses, a strategy to enhance local assembly of private vehicles will be developed and once implemented; it will have a far reaching impact in terms of jobs and the import bill,” an excerpt from NDS1 says.
Over the past two years, Zimbabwe has imported over US$70 million worth of public buses and delivery trucks, taking advantage of a lower duty regime to cover shortages due to lack of local production.
In 2014, Zimbabwe spent $469 million importing vehicles at a time capacity utilisation at local car assemblers had fallen to a lowly five percent, amid growing calls for the capacitation of the local car manufacturing industry.
In 2013, the Motor Industry Association of Zimbabwe said the country exported 760 cars against 52 000 imports. Of the vehicles, the highest value was for transportation vehicles.
The Treasury chief said the Government was already doing a lot to support the industrialisation policy, adding interventions were on the way. Already a cocktail of tax rebates has been extended to various sectors.
“We have actually done some work to see what the impact (of various tax incentives) has been and it’s been huge over the years and we will continue to deepen that,” the finance minister said.
Minister Ncube said the Government will continue to provide incentives to drive local production of goods instead of depending on imports, which require elusive forex and are vulnerable to external sectors.
Notably, Minister Ncube said Zimbabwe has the capacity to manufacture automobile products such as buses and cars through Quest Motors in Mutare and Willovale Mazda Motor Industries in Harare.
“Surely, we will give incentives for local production of cars and buses. We could even say to the Government, for all the pool cars that we use in Government, let us buy local. You can see I am already giving hints.
“That is, in a way, industrial policy, the way we intervene strategically to support growth of our industry, clearly that is part of NDS1,” he said.
Local car producers such as Quest Motors said they should be employing about 1 500 workers per shift but only manage about 150 at the moment, due to various constraints, including low demand.
Quest Motors is currently producing Foton, Chery and JMC vehicle models which they say are cheaper for the local market, but still equal to the task like any of the latest Toyota, Mazda, Nissan or any of the popular trendy international models.
Quest Motors last year also signed an agreement with a Chinese bus manufacturing company, Zhongtong, the manufacturer of the Zupco buses, to manufacture the same model buses under franchise.