Victoria Ruzvidzo In Focus
It is now a year since Statutory Instrument 64 was gazetted to manage imports. This came against the background of a rising import bill that upset Zimbabwe’s trade balance. The results so far have not been disappointing.
A few months ago, Industry and Commerce Minister Dr Mike Bimha issued a statement explaining the positive outcome of the ban. He said Zimbabwe had so far saved $1 billion which would have otherwise been channelled towards the importation of water, floor polish and other trinkets. Local manufacturers’ capacity utilisation also rose to 47 percent from 34 percent.
Indeed, the minister gave a run-down of specific companies that were now operating viably as a result of increased domestic demand and subdued competition from imports. Some have rehired employees that had been retrenched while new jobs have been created. The statistics are quite impressive. Initially, some of us were pessimistic about SI64 as we saw it as being too protectionist to an industry that was failing to adapt to the changing environment and was producing largely poor quality goods that the domestic market resisted, preferring better quality imports.
But it turned out it was more of a chicken and egg situation where industry needed Government support through some protective policy so that it could fire again. Indeed, we have noticed that SI64 has achieved quite significant results over the past few months.
From an import bill of $6,3 billion in 2015 to $5,2 billion in 2016, much of it attributed to SI64, progress has indeed been made and better results are expected this year. This is highly commendable for the macro-economy and also at micro levels where some breadwinners are back at work and are able to fend for their families. It may not be to the required extent but at least there is something on the table.
Efforts need to be directed towards consolidating the gains and introducing measures that prop up production and productivity. While we applaud Government for taking that bold move which was initially quite unpopular, we ask the firms themselves to rise to the occasion and work at producing high quality goods.
We would not want SI64 to create a scenario where people are forced to buy local just for the sake of it and yet some of the products are of low quality. While there is no excuse for importing water, floor polish, matches, cotton buds or any such basic items which are available here, there are some products on the market that do not measure up in terms of quality.
I was saddened to read that this country is spending at least $3 million in importing diapers within a few months while millions of dollars also go towards hair and other make-up products. But in some instances the local market has struggled to find good quality replacements, not necessarily of the products mentioned here, but of many items.
These are amounts the country can use to import such necessities as power, medical drugs or some such that we have to import to augment local supplies. But the consumer is not entirely to blame. They need to be happy with what they buy and it is their human right, as enshrined in the United Nations Human Rights Charter to choose to have what they desire for as long as this does not infringe on the next person’s rights.
Traditionally, many firms have taken the local consumer for granted but this can only happen to their peril. Consistent supply and production of good quality products have a way of just solving issues for most firms. This means in the long term they may not need to go into the overdrive in terms of convincing the consumer to choose their product the next time they visit the super- market.
When some products are written export quality and others are so plain and ugly one is forced to think that the domestic market is being taken for a ride. Of course, it is not as simplistic as this because there could be demands from the export market which do not necessarily mean what is available on the local market is sub-standard.
However, firms need to know that in some cases they can only cheat a consumer once. The minute they are not happy with a product they turn their backs on it and this will reflect on the balance sheet. Turnover drops and hence the bottom line. It is, therefore, critical that protective policies are matched with improved production of products in terms of quality and availability.
We need more firms back on their feet and more people employed but the numbers the economy requires will happen when the equation balances. The Buy Zimbabwe or buy local campaign is not bad thing at all. It ensures that the bulk of our earnings remain on local soil instead of it being enjoyed elsewhere. It means more wealth can be generated and the ripple effect of this will be there for all to see. People are concerned about better living conditions and this can happen once we get the matrix right in terms of domestic production and consumption.
Many products have been exported into Zimbabwe or dumped even because of the allure of the US dollar, particularly by some regional markets and this has not helped the situation.
However, the competition can easily be subdued if the quality of the local product matches or exceeds that of imported goods. Of course, it’s easier said than done because of the constraints firms are facing but the truth is the markets have become a place where only the fittest survive. Hence local firms need to develop the muscle and tenacity to hold their own in the marketplace.
People will buy locsal and visit local tourist resorts and even trust local hospitals more if the product and service quality improve. It would be unfair to force them to settle for mediocrity in the name of buying local so producers need to stand guided. Experiences in such countries as China, Ghana, South Africa, USA and Nigeria indicate that the buy local strategies and initiatives, whether adopted voluntarily or involuntarily, can yield great results for economies. They result in healthier trade balances while buoying local production.
China has introduced a Buy China policy to prop up local consumption to encourage improvements in technology, quality of products and business innovation, among other facets.
Nigeria, too, has done the same. During the days of the Great Depression, the US had to introduce a similar policy to breathe life into local industry. Hence if applied well, policies that persuade or somewhat force consumers to prefer local produce yield better results.
We grow beans and certainly can make baked beans. We can do the same for bottled water. It’s not like it is beyond us to do the same. Indeed, our approach to matters regarding this economy demands a nuanced approach. I will give a simple example. Fairly recently, the South African poultry industry was up in arms with the government over cheap chicken imports from the US. They pleaded for protection as their industry was adversely affected.
The government took it up with the authorities in the US would have none of it and threatened to repudiate the AGOA on terms which had been initiated by former president Bill Clinton.
The moral of the fiasco is that it is pretty normal to seek protection where national interest is manifestly negated. One cannot be insipid in the face of decimation from external forces. So viva SI64, but let’s not let up or compromise too much on quality.
In God I trust!!