Factory closures costing us

the National Economic Consultative Forum.

Without hesitation we can safely say, he brought life to the NECF and managed to build it into a critical national institution in which a diversity of views was accepted as a core component of building Zimbabwe into a prosperous nation.

Buy Zimbabwe hopes that the successes and respect that he brought to the NECF will continue and that the spirit of dialogue and engagement that we sometimes lack as a country will carry on despite his untimely death.

Of course, it also makes sad reading that when our nation is still grappling with creating jobs and realising a future envisaged by the likes of Mr Mushaninga and other erstwhile economists, our import bill shows no sign of abating.

Statistics for the first quarter of 2013 indicate that we have already surpassed US$1,6 billion in imports against less than half that figure being received from exports.
As usual, its fuels and many products that we actually still do make that constitute the bulk of the figure.

Against this background, a leading manufacturing company, Reckitt and Benckiser, was reported to be considering closing its Harare factory owing to Zimbabwe’s uncompetitive cost structure.

The makers of Dettol and many household products apparently are looking at imports as they are cheaper and more profitable.
Meanwhile, the few workers that had thanked the Lord for providing them with employment at a time many are languishing on the streets looking for jobs, are suddenly facing up to this cruel fate.

The imports that are easier to bring into the country and comparatively cheaper for local households are literally biting the hand that feeds them.
The country that also makes it easier for companies to close and workers to lose their jobs is also set to lose big time.

Instead of creating jobs and generating exports, we add to the worsening account deficit. Domestic buying power continues to dwindle and the ripple effects of company closures are spreading beyond one particular entity. And yet against all this someone is profiting from the mess.

Forgive us for making regular reference to our neighbours South Africa. But we are almost certain that the trade union movement, Cosatu, would have been up in arms had this occurred within their borders.

Remember the tough fight that retail giant Walmart had to engage in when it took the decision to enter the South African market.
While the attraction was that Walmart would leverage on its size to bring prices down, Cosatu’s primary concern was safeguarding jobs in the country.

At the end, Walmart had to make concessions and with the firm undertaking to source products from locals including those in the agricultural sector.
Government and other retailers and general public fought hard to ensure that these concessions were made.

Walmart thus had no choice but to accept the terms set by the country’s various stakeholders.
So why is it that when it comes to Zimbabwe we are blinkered to regional and global realities and we make it very easy for companies to dump our workers and bring in cheap imports?

For the avoidance of doubt, we are not suggesting that the prohibitive cost structure that Reckitt and Benckiser cite as the reason for their decision is imaginary.
In fact, it is very probable that from purely a managerial point of view, producing locally is difficult to sustain.

Our source of contention is Government’s continued tolerance of a situation in which importing products makes more economic sense than producing locally.
Surely, we have many options, both fiscal and otherwise, to make it more restrictive to import and more lucrative to produce here.

Just recently, the United States of America embarked on the so-called stimulus programme where strategic companies such as General Motors and a host of financial institutions were supported to remain operational.

By supporting those companies, the United States government did not suddenly become blind to issues that had to be dealt with for them to be more competitive.
The package was designed to be both carrot and stick.

On the one hand, Government ensured that companies survived and, on the other, it forced them to assess various operational issues needed to get them into shape.
While it is true that the US has the financial muscle to roll out its fiscal stimuli and Zimbabwe does not have such ability, what is also true is the overriding concern to ensure that the economy does not experience systemic failures, domestic demand does not continue to fall and jobs are saved.

Our present financial constraints will not absolve us from the clear economic turbulence that is certain to follow if we allow companies to find it easier to import than produce locally and more profitable to close their factories.

The question of economic muscle thus does not mean Government should not play its role of safeguarding local interests whenever a situation such as the one we have erupts.
We also know that other multinational corporations that produce goods from other African countries are looking at the example set with keen interests.

There is certainly little reason why their shareholders will not advocate for them to close and import.
Before we know it, the space we had to produce locally and which we sought to defend is gone and we become an import-dependent country for a very long time to come.

The Ministry of Industry and Commerce must tackle this matter before it gets out of hand.
Residents of Harare must also be advised that Bulawayo industrial areas are fast turning into ghost towns because action was not taken at the appropriate time. It seems fair to believe that representatives of workers have lost lobbying capacity and now follow events as they unfold.

Clearly, they should at least contest these decisions and lobby their constituents against buying the imported products that has tendency of impoverishing locals.
The message is that we must stop finding it easy to close factories and focus on saving jobs.

That is the thinking that must preoccupy all stakeholders. We must all exercise our minds in ensuring that Reckitt and Benckiser does not proceed with this chosen path.
For now let us put our heads together to save the few jobs we have in the country.

Till we meet again, let us remember Buying Zimbabwe is critical for creating wealth, jobs and building our pride. God bless.