Cheap Imports Killing The Zimbabwe Manufacturing Industry

Gweru, March 13, 2010 - Cheap imports into Zimbabwe are killing the local manufacturing industry, which is finding it difficult to compete while the Indigenisation Act will see more local businesses suffer.

Business representatives attending a business breakfast meeting in Gweru on Friday with  Trade and Industry Minister Welshman Ncube, expressed concern that there were finding it hard to keep afloat in view of the unfair stiff competition from cheap imports, particularly from China. They were also concerned about the Indigenous Act, which require companies to cede 51 percent of their shares to locals, saying this will scare investors away and hurt more the local businesses.

Alex Marufu, Midlands chairperson of the Confederation of Zimbabwe Industries, said: “As CZI Midlands Chapter, we have taken note of the need to do a research on the impact of imports and the Look East policy on the perfomance of industries."

A human resources officer with the shoe manufacturing company, Bata, Joseph Ndlela, said: "It cost us a $1.50 to make a pair of patapata (rubber slippers) before putting transport costs and marking profit, yet in some shops you get them at one dollar for two pairs. We just can’t compete despite that we have good quality.”

While the cheapest pair of shoes at Bata costs around Usd 10, some imported shoes especially the popularly known “Zhing zhong” Chinesse shoes cost Usd 3 a pair

Roderick Musiiwa, Anchor yeast chief operations officer, said while they made good quality yeast, there were also threatened by cheap imports. He said consumers were looking for cheap goods and not quality.

The business community said importers were not paying duty for their goods that is why they could afford to reduce their prices.

They also so lamented the constant power cuts, water shortage, high cost of finance and  lack of favourable business policies among others.

Ncube said: "Government is aware that all our efforts to turn-around our industries will be very little unless we turn-around the enrergy supply,” he said.

He however said government alone did not have answers. He said there was need for self introspection by service providers.

“We need external money to come in the country," he said.

Ncube agreed with the business community that the timing and content of the controversial Indeginisation Act was problematic and
added that Zimbabwe could not afford to have an environment that was not investor friendly.

He however explained that the 51% in the Act was not a presription to say that all businesses should have 51% owned  by the indegenous but said it was only an aspiration.

The business community however warned the minister that this was likely to be either misinterpreted or abused and would scare off investors in the country.