Duty reduction on textile products to worsen local firms’ plight: Bloch

increases in import duty on clothes and textiles.
The announcement follows a public outcry that clothing products would be expensive, as local industry still did not have the capacity to meet national demand.
In an interview, Dr Bloch, who is also a director of a number of textile companies, said capacity utilisation in the clothing and textile sector was subdued.
He said the reduction of duty on imported clothing and textile products would be counter-productive.
“The local clothing and textile companies are extremely vulnerable to inconsistence of consumer demand as a result of imported products. The slashing of duty on imported clothing and textile products will further strain production capacities of the firms,” he said.
He said the liquidity crunch in the economy worsened the viability of local industries rendering them uncompetitive in the face of stiff competition resulting from imports entering into the country.
“The imposition of import duty was aimed at creating a level playing field between foreign and local firms. By slashing duty on imported clothing, it means we are allowing local companies’ closure as they cannot match with competition.”
Presenting the 2012 national budget in November last year, Finance Minister Tendai Biti increased duty on clothing and textile goods to 40 percent plus $3 per kilogramme from 40 percent plus $1/kg.
Consultations to review the tariff will be made soon.
The local clothing and textile sector expressed concern over the influx of imported products, which the sector said rendered it uncompetitive.
About 64 companies in the clothing sector have folded with close to 4 000 workers made redundant as the combined impact of smuggling, particularly of cheap Asian goods, policy structure and mounting labour costs took its toll on the manufacturing sector.