The ManicaPost
Sparkleford Masiyambiri : Business Correspondent
South African Government Minister of Small Business Development, Ms Lindiwe Zulu has given a refreshing declaration when she announced that her government supports the Zimbabwe Government’s Statutory Instrument 64 of 2016 on import controls.This comes hard on the heels of a frenzy regional diplomatic offensiveness set into motion by some Zimbabweans.
SI 64 of 2016 is ear-marked to cater for long term interests for the entire nation to ensure creation of jobs, and the continued sustenance of our balance of payment. This will definitely enhance our continuity for the good of the populace as opposed to promoting the retail economy which is currently characterising our economy.
In economics, protectionism is the economic policy between countries through methods such as heavy tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow fair competition between imports and goods and services produced domestically. In that vein, protectionist policies protect the local businesses and workers within a country by restricting or regulating trade with foreign nations.
Zimbabwe’s economy is gradually recovering from more than a decade’s decline which culminated owing to a number of factors which include the imposition of sanctions by the western powers, brain-drain, and economic policies which had difficulties in addressing the realities on the ground.
This is time to face the realities and put in place innovative strategies to stir domestic consumption of locally produced goods in the letter and spirit of ‘Buy Zimbabwe’. This is a sure way of stimulating growth by increasing demand of local goods in the absence of cheap imports.
In her address, Minister Zulu pointed out that South Africa and Namibia have similar protective economic policies which are meant to defend their respective economies. Therefore, we are not unique either. In fact, we should be under unbridled impetus to focus on our long term national interests and secure our future livelihoods. The continued influx of foreign goods only create jobs in the exporting countries at our own peril.
Statutory Instrument 64 of 2016 was applied in order to protect our infant industries from unequal international competition posed by major producers like China. The import regulatory regime acts as an incubator that, in theory, should allow the domestic industry ample time to sufficiently develop and grow into a competitive position on an international landscape in the long run.
However, all said in enerst, it is profound that the cheap and less durable Chinese goods devoid of quality should be eradicated from the market for they are giving local consumers a raw deal. Supposedly, local manufacturers are afforded the chance to provide substitute products to all Chinese wares; certainly, this would go a long way in the resuscitation of the local manufacturing sector whose market is exploited unjustly by such poor quality products from China.
This is not maligning the Chinese per se, but it’s a justified challenge to the quality of their products which can hardly meet the minimum customer expectations by any measure. Surely, the continued unchecked inflow of such products into local markets is synonymous with self mockery. Something needs to be done to curtail such unfair business deals perpetrated by our Chinese friends.
In practice, international competitors like the Chinese firms employ aggressive trade tactics which include flooding the market in an attempt to gain lion’s share on the market to put domestic producers out of business. The local Government may use tariffs to mitigate the effects of such foreign entities employing what may be considered unfair tactics.
The developed world also employs protectionism to protect certain industries that are deemed strategically important, such as those supporting national security. Defence industries are often viewed as vital to state interests, and often enjoy significant levels of protection.
For example, while both Western Europe and the United States are industrialised, both are very protective of defence-oriented companies.
This is a demonstration that we are in line with global practices which are not peculiar to us alone on this part of the world.
Meanwhile, it is critical to note that the promulgation of Statutory Instrument 64 of 2016 by the Zimbabwe Government is a good precursor to other raft of measures which should be adopted to stimulate local growth for the good of our economy.
It is detrimental to keep our nation as a supermarket economy as it is.
This keeps us as fodder for foreign businesses at the expense of the local economic turn-around meant to save us on a long term basis.
