SA shuts door on Zim imports
15/01/2012 00:00:00
by Staff Reporter
ZIMBABWEAN exporters must scramble to find new markets or risk commercial peril after South Africa slapped an effective import ban on a raft of products in a bid to protect local producers.
South Africa is Zimbabwe’s leading market, accounting for about 56 percent of all exports with China and the United Arab Emirates coming a distant second at 6 percent. However, under a deal agreed between the government, labour and business organisations, at least 75 percent of all procurement in Africa’s largest economy must now come from local companies.
“The development is likely to have an impact on Zimbabwe’s external sector due to the fact that South Africa remains the major trading partner with Zimbabwe,” the Ministry of Finance warned in its latest monthly economic review.
The regulations, which also come with thresholds for minimum local content in the targeted products and services, took effect on December 7, 2011.
However, products that must immediately satisfy the local content requirements such as clothing, textiles, and leather products are not among Zimbabwe’s key exports to its southern neighbour.
“The clothing, textiles, footwear, leather products industries are in decline, with little room for exports. The canned vegetable market is also constrained,” Zimbabwe’s treasury bulletin added.
Exports to South Africa mostly comprise unprocessed tobacco (13.5 percent), minerals (over 36.8 percent) and sugar (2 percent), which are not on the list.
Even so, the treasury warned that there was still “potential for reduced exports” as more products would be added to the initial list.
Exports are, however, still expected to grow 15.3 percent to US$5.1 billion in 2012.
With imports set to top $6.8 billion, the country’s current account deficit is now projected to ease to US$1.7 billion against US$2 billion for 2011.
Labels: IMPORT TAXES
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Maize price deal sealed
Saturday, 06 August 2011 19:57
By Africa Moyo
THE Consumer Council of Zimbabwe (CCZ) has clinched an agreement with the Grain Millers’ Association of Zimbabwe (GMAZ) to ensure that the price of maize meal is not increased by profiteers in the wake of the reinstatement of duty on basic commodities.
Negotiations between the two parties commenced in earnest last Wednesday on the sidelines of the
Buy Zimbabwe Campaign insignia launch in Harare.
A deal between the millers and the consumer watchdog, which has widely been criticised for being a toothless bulldog, was eventually sealed late last week.
In an email sent to CCZ executive director Ms Rosemary Siyachitema last week, GMAZ national chairman Mr Tafadzwa Musarara said his organisation would not seek to profiteer in the new dispensation brought about by the reintroduction of duty on imported basic goods.
“On behalf of the milling industry, we commit to you that, all things being equal, there will be no price increase of maize meal, as has been the case in the last two years,” said Mr Musarara.
The deal between the CCZ and GMAZ comes at a time when a fresh frenzy of “unjustified” price increases is sweeping across the country following the removal of duty on imported basic commodities such as cooking oil and maize meal.
Finance Minister Tendai Biti reinstated duty on some imported basic goods after relentless pressure from representatives of the manufacturing sector who wish to breathe life into the country’s literally comatose industry.
Industry had long clamoured for the reintroduction of duty on imported basic consumer goods with the hope that local products would be better positioned to compete with foreign goods that are produced at low prices and are consequently sold at relatively low prices.
Government waived duty on imported basic consumer goods early 2009 in a desperate bid to arrest acute food shortages that also resulted in spiralling prices where the goods were available.
However, while Government has been focusing on resuscitating local industry, which is grappling with a host of challenges including a liquidity crunch resulting in high borrowing costs, the Confederation of Zimbabwe Industries (CZI) started lobbying for the reinstatement of duty on imported foodstuffs so as to make local producers viable.
And faced with a catch-22 situation where it had to strike a balance between availing consumer goods at fair prices and reviving the local industry, Government opted to maintain the duty-free regime, at the same time sourcing cheaper credit lines for industry to increase capacity.
Minister Biti eventually succumbed to industry’s pressure to remove duty and announced the return of duty on imported foodstuffs such as maize meal and cooking oil late last month when he presented the Mid-Term Fiscal Policy Review statement.
Said Minister Biti: “The supply of most basic commodities by the local industry has significantly improved, hence I propose that the suspended duty in the remaining basic commodities be reinstated.
“The reinstatement of duties on maize meal and cooking oil will improve the value chain from the farmer to the industry through contract farming, increase capacity utilisation, stimulate local production of stockfeed and also enhance employment levels.”
Nonetheless, market watchers say while the manufacturing sector has welcomed the reintroduction of duty on food imports with glee, retailers have already increased prices of basic goods, raising fears that the ghost of inflation, although not in the proportions of 2008, will return to haunt the economy that was showing signs of recovery.
Ms Siyachitema has castigated the reintroduction of duty, saying it was ill-timed since local industry is struggling to boost capacity.
Some organisations have been pushing for the banning of imported foodstuffs to enhance local production, but GMAZ says while it supports the reinstatement of duty to help the local industry, “imports must be allowed to mitigate on deficit not to substitute local products”.
“GMAZ successfully managed to lobby for the reimposition of duty on maize meal in order to recreate market space for millers on the domestic market. The aim of duty imposition is to level the playground, discourage (and not ban) imports. Maize-meal imports, among other things, caused unprecedented job losses in the milling sector and negatively affected producer prices of maize.
“The 10 percent duty imposed by the Minister of Finance is consistent with the regional tariffs levied. In fact, the 10 percent duty on maize meal is the lowest in the region (if you are allowed to import).
“We, however, believe that imports must be allowed to mitigate on deficit not to substitute local products,” said Mr Musarara.-The Sunday Mail
Labels: IMPORT TAXES, MAIZE, NEOLIBERALISM, TAFADZWA MUSARARA
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Taxes on telecommunications equipment worry Zain director
By Florence Bupe
Wed 24 Feb. 2010, 04:10 CAT
TAXES attracted by the telecommunications equipment and services have continued to be the main hindrance in infrastructure development, Zain Zambia managing director David Holliday has disclosed.
Appearing before the parliamentary committee on communications, transport, works and supply yesterday, Holliday said the high taxes on equipment had stagnated the telecommunications sector, particularly in rural areas.
“The taxes attracted by the telecommunications equipment and services remain a major hindrance in the deployment of costly infrastructure particularly for rural areas and certain economically depressed areas,” he said.
Holliday told the committee that the telecommunications sector has been negatively impacted through the absence of short and long term tax incentives.
“The telecoms sector is negatively impacted between 31 per cent and 35 per cent in total being taxes on revenue as contribution to the state treasury,” he said.
Holliday suggested that taxes charged on renewable energy tools such as solar equipment which is vital for sector development in rural areas should be removed for a considerable time.
He also noted that the lack of an integrated licensing regime had increased the cost of telecommunication service expansion.
Holliday said rural areas in the country had great potential which remained unexploited.
“The potential for rural connectivity which spurs infrastructure development is vast and remains unexploited in Zambia. Our shortcomings in fully meeting these targeted areas for telephony universality need a quick rethought beyond projects and programmes on rural connectivity,” said Holliday.
Labels: DAVID HOLLOWAY, IMPORT TAXES, ITC, ZAIN ZAMBIA LIMITED PLC
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