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Charity Ruzvidzo Business Reporter
THE government should urgently review the country’s pricing model and account for mineral extraction to contain the skyrocketing import bill, economists have said.
Zimbabwe’s import bill clocked nearly $4 billion in the past two years according to the Zimbabwe National Statistics Agency (Zimstat), creating a trade deficit of $1,7 billion between January and June this year.
Analysts say the trend spells doom for the economy and urge the government to take urgent measures to tame the situation.
Bulawayo-based economic analyst and Ball Joints manager, Ephraim Makara, said reviewing the pricing model could increase domestic consumption and beef up local firms’ performance.
“Prices are generally high in Zimbabwe. Local companies always want to make 100 percent profit leading to people opting for imports.
“The government should find a way of monitoring the pricing system and ensure our profit margins are reasonable,” said Makara.
He said increased accountability on the mineral proceeds could result in a positive change.
“This country has a lot of minerals that we are exporting. There is need to ensure that we are getting real value from them and proper documentation of the mineral being exported. Minerals should be sold after beneficiation for increased profits,” he said.
Another economic analyst Dr Davison Gomo said the huge trade deficit was a clear indication of the dearth of local industries.
“Local production is being outweighed by imports, a reason that has led to the collapsing of our industries,” he said.
Dr Gomo said the country’s corporate leadership should be transformed to meet competitive global production approaches.
“Those that lead companies don’t want to give way to young blood. Imaginative and creative minds can do better,” he said.
Dr Gomo, however, said only collective efforts among different interest groups would salvage the situation.
“The task is not entirely on the government, politicians, business leaders and the community at large should devise solutions that can assist the production capacity of the nation,” he added.
Tafadzwa Matsika, a Bulawayo-based economic analyst said only the government can rescue local firms to avert disaster.
“Local companies should get assistance from the government in terms of innovation and retooling if they are to outwit imports,” he said.
“With the current trends, the import bill is most likely not going to change as long as we are stuck with traditional production models in business operation.”
Matsika said illegal Western economic sanctions had worsened the situation.
“The nation is no longer exporting due to sanctions. The balance between exports and imports is affected and that results in the trade deficit.”
Bradwell Mhonderwa, another analyst, said a policy intervention by the government would remedy the situation.
“A lot of policies have been put in place to assist industries but with no improvement. The government should stop putting policies on paper but make them practical. They should focus more on ways to improve our industry rather than concentrating on luxurious things like purchasing vehicles if conditions are to change,” he said.
derick.khumalo