EDITORIAL COMMENT: SI64: Tonic for economic recovery

Despite initial resistance from cross-border traders and opposition political parties to Statutory Instrument 64 of 2016, there is evidence and creeping appreciation of a slow upturn in the fortunes of the local manufacturing sector. In some cases, capacity utilisation is back to 100 percent in a space of less than half a year. Some companies are even casting their sights over Zimbabwe’s borders into the regional market for their products. One such organisation worth mentioning, among many, is Chloride Zimbabwe which is looking for markets in the Sadc region for its motor vehicle batteries.

A tour of the Workington industrial area by Government officials led by the Office of the President and Cabinet last week was a revelation. A number of companies are taking advantage of the ban on selected food products to retool and increase production.

During the tour on Wednesday, Chief Secretary to the President and Cabinet Dr Misheck Sibanda pointed out that Government was determined to see the revival of local industry. He said the Office of the President and Cabinet would closely monitor implementation of the 10-Point Plan enunciated by President Mugabe last year.

He also said in addition to making sure there was a follow up on Government programmes, they were keen to ensure the private sector played a key role in the economic development of the country. This should be welcome news.

However, this mutual cooperation can only be beneficial if there are regular consultations on policy issues. That presupposes the private sector wants to make a positive contribution to what Government is trying to do.

Zimbabwe is not a developed country. It is a fairly young country comparatively. It is still nursing the wounds of long years of colonial rule. That means there are a lot of historical issues to be resolved. It would therefore be naïve in the extreme for private sector players to think blacks will lift themselves from poverty by their bootstraps. That can’t be realistic.

Government has therefore adopted policies of a developmental state. It is not enough to talk of a conducive policy environment for investment and economic growth and stand aside. There are others who benefited from colonial racial policies. That is why at times Government intervenes to carry out redistributive policies.

Obviously there is bound to be opposition from those who fear losing their colonial privileges. But that should not be viewed as Government pursuing racist policies. It is simply to bring everyone at par through affirmative action policies for the previously marginalised and disadvantaged.

Similarly, Statutory Instrument 64 which was promulgated in June to restrict imports was not a thoughtless act of protectionism. Local industry has never recovered from the ravages of Esap which was adopted in the 1990s. Many will never recover. SI64 was meant to give local manufacturers a breathing space from the pressure of cheap imports. Protests that free market are the remedy for everything are ill-informed.

There are sectors which are recovering fast because of SI64. Capacity utilisation has risen from 33 percent before SI64 to around 47 percent. That is not a small margin in a period of six months. Moreover, imports have declined steadily in the same period. That is in turn reducing the trade deficit.

But in more practical terms, it means Zimbabweans are consuming local products, in the process saving industries which could have been forced to shut down without SI64. It also means jobs are being saved. But more importantly, scarce foreign currency is being saved for critical imports, particularly fuel and medicines.

What we however want to underline is that SI64 is not going to be a permanent feature. Zimbabwe is not an island. Neighbours are itching for revenge. They can only take so much before they hit back.

It is for this reason that we commend those companies which have moved with speed to retool and prepare for full-fledged competition. This is not time for profiteering and ripping off the consumer. Thus those companies which have a long-term view should benefit immensely from SI64 and be ready to stand alone.

Zim-Asset offers a lot of opportunities and the private sector can work closely with Government to grow this economy. Foreign investment is important, but why not give local companies the lead? Let’s witness a new spirit of cooperation rather than negativity.

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