Local goods 5-25% duty
Irked by an influx of foreign products and commodities on the local market, Zimbabwe's business sector and concerned stakeholders have launched a Buy Zimbabwe Campaign to promote local goods.
Zimbabwe experienced a serious influx of foreign products after the inflation rate reached an all-time high of 782% in February 2006, triggering nationwide shortages of basic commodities. The shortages also resulted in a thriving black market.
Robert Muganda, Buy Zimbabwe Campaign media and communications executive, said that the campaign was meant to promote Zimbabwe's quality brands.
On 3 August 2011, a Buy Zimbabwe day will be held in Harare to offer an opportunity for local businesses to present their product offerings to consumers and highlight their commitment to providing quality products and services.
Duty-free break
Buy Zimbabwe notes that the expiration of the current duty-free regime at the end of July 2011 is an opportunity for Zimbabwe to revisit its policy framework on the import and export of goods, services and raw materials.
The organisation is pushing for a policy framework that is more suited for a growing economy and encourages competitiveness for both local and foreign products on the local market.
Imported finished goods are finding their way into the country at 0% duty while local companies import raw materials at between 5 to 25% duty depending on the class of the raw materials.
"This contributes to cost build-up on finished local products. This is worsened by low capacity utilisation, high operating costs and uncertainties in the operating environment," said Muganda.
The majority of the local companies have had to transfer costs to the consumer through high prices for the local products. Muganda said that a close examination of the current policy on duty revealed that it is largely skewed towards foreign products and threatens the survival of local companies.
Buy Zimbabwe is therefore encouraging government to ensure that the importation of goods is not at the expense of local businesses that have over the years been rendered uncompetitive in the face of foreign alternatives.
Post published in: Business