Africa Moyo Business Reporter
Government says local industry has the capacity to reverse the ugly tide of rising imports, which soared to $2,87 billion between February and June this year, if supported by correct policies.
This emerged during a Buy Zimbabwe-Zimbabwe Agricultural Society (ZAS) breakfast meeting held concurrently with the Harare Agricultural Show yesterday.
Minister of Industry, Commerce and Enterprise Development Dr Mike Bimha, who was guest of honour, said the rising current account deficit was worrying and needs to be urgently arrested.
“It is evident that Zimbabwe exhibits great self-sustaining opportunities in different sectors, which include mining, agriculture, manufacturing, tourism and infrastructure, among others.
“Therefore, with the right policies, the local industry has immense potential to reverse the growing trend of (the) import bill,” said Dr Bimha.
Statistics from the Zimbabwe National Statistical Agency (Zimstats) reveal that the current account deficit has reached a staggering $20 billion since adoption of multiple currencies in 2009.
In the five months from February to June this year alone, imports worth $2,87 billion against $1,62 billion exports were recorded.
The imports were skewed heavily towards consumptive goods.
The gap is widening as the country’s imports stood at $2,25 billion against exports of $1,31 billion during the same period last year.
Worryingly, $1,22 billion of this year’s imports came from South Africa against exports of $763,94 million.
South Africa is Zimbabwe’s biggest trading partner.
However, other notable imports in the five months to June 2018, worth $626,88 million, came from Singapore.
Disappointingly, Zimbabwe exported goods worth a measly $2 900 to Singapore in the same period.
Between February and June this year, major imports were mineral fuels including oils, which gobbled $1,378 billion. This represents 47,8 percent of the total import bill.
Cereals chewed $287,1 million; machinery including computers ($285,4 million); vehicles ($186 million); electrical machinery and equipment ($146,4 million); pharmaceuticals ($111,9 million); plastics and plastic articles ($100,5 million); fertiliser ($97,8 million); animal/ vegetable fats, oils and waxes ($86,1 million); iron, steel and parts ($63,7 million) and other chemical goods ($7,4 million).
Dr Bimha said consumers should be encouraged to prefer locally produced goods as opposed to imports so as to save foreign currency and transform industry.
He also encouraged industry to use latest technologies to improve the quality of their products and reduce production costs.
“Increased preference of local products and services can only be possible if institutions such as Buy Zimbabwe continue to make the necessary interventions to educate consumers on the benefits of buying local to create pride, wealth and jobs.
“This is in line with (the) national vision to have Zimbabwe as a middle-income country by 2030,” said Dr Bimha.
In 2016, Government intervened with the Statutory Instrument 64 of 2016 which has since been upgraded to SI 122 of 2017.
The laws restricted the importation of some products such as cooking oil, construction material, dairy products and toothpicks, to boost local capacity and save foreign currency.
To accelerate the import substitution drive, Government, Buy Zimbabwe and other stakeholders, have developed a Local Content Policy, which will ensure the increased use of local factors of production for the country’s industrialisation.