Govt works on framework to refine SI64
Walter Nyamukondiwa in KARIBA—-
Government is working on a framework to refine Statutory Instrument 64 of 2016 to progressively promote the use of local materials, products and subsequently facilitate industrial growth.
Anchored on the tenets of SI 64, the local content regulations will conform to World Trade Organisation regulations guiding trade.
SI64 was introduced last year to reduce dependence on imported goods and stimulate local productivity.
The new framework seeks to put to rest concerns highlighted by regional countries who felt SI64 was freezing out their products, and that it impinged on free trade agreements.
They also said the move went against the ethos of regional integration.
The promulgation of the regulation will be preceded by wide-ranging consultations involving stakeholders including consumers and industry players.
Speaking at a Ministry of Industry and Commerce 2017 strategic planning workshop here on Tuesday, Industry and Commerce Minister Dr Mike Bimha said SI64 was serving its purpose, but needed to be refined.
“We came up with SI64 as a measure to arrest a situation where the country had become a dumping ground for foreign products, of which were hopelessly sub-standard,” he said.
“It was a precursor to resuscitation of the country’s industry. We want to follow that up with local content regulations, which will promote use of local products and raw materials to give impetus to our own industry.”
He said SI64 was ad hoc in nature and that new regulations would reinforce and buttress its provisions.
Borrowing from SI64, the regulations will also ring-fence a set of local products or those which the country has the capacity to produce, with the list being progressively expanded as capacity improves.
He said the regulations would provide a lasting solution to the issue of imports and standards to be met locally so that they compare with those on the international market.
Dr Bimha said submissions were already being made on provisions of the regulations which will see exhaustive consultations before they are brought before Cabinet.
Economist Dr Gift Mugano said there was nothing amiss with Zimbabwe adopting the local content regulations as the world was moving towards “smart protectionism”.
“We have been late off the blocks because other countries such as South Africa put in place the measures as far back as 1965 and it has been evolving ever since.
“It was strengthened in 2012,” he said.
Globally, most countries were now inward-looking and adopting smart protectionism, which became more pronounced with global economic crisis around 2008, he said.
Even in the region some countries are implementing the measures.
Dr Mugano said the regulations should clearly specify procurement of local content and not procurement by locals as that will leave room for locals to bring goods from outside.
He said the regulations should initially focus on economic areas like mining, agriculture and partly manufacturing, which have a comparative advantage.
“Failure to strike a delicate balance will lead to shortages of some products,” he said.
The regulations are expected to complement the public procurement reforms that are being undertaken with calls for a rating system that gives a higher rating to those buying locally with incentives.
SI64 has seen an improvement in industrial capacity utilisation in areas such as cooking oil and detergent manufacturing.
Participants called for a review of Chinese deals saying they encouraged flight of capital while leaving infrastructure and loans that will take long to repay.
They said the regulations should ensure that materials are sourced locally with a large chunk of the money remaining in the country.