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THE Minister of Industry and Commerce, Mangaliso Ndlovu, says a Local Content Committee will soon be put in place to outline quick implementation guidelines and provide incentives for the import substitution policy.
The desire to substitute imports and achieve inclusive industrialisation took centre stage during a business interface meeting on the sidelines of the just ended Zimbabwe Agricultural Show in Harare. Stakeholders are agreed that the Local Content Strategy, recently approved by Cabinet, must be an accelerator for import substitution, and increased capacity utilisation.
To that end, “a Local Content Committee will be announced before the end of August 2019”, Minister Ndlovu said in a speech read by his director for legal services, Mr Never Katiyo.
“This is important as we collectively seek to resuscitate the economy and accelerate its development so that we become an upper middle income economy by 2030,” he said.
The Minister said the main functions of the committee include, among others, reviewing, assessing and approving local content implementation plans; setting guidelines and minimum local content levels for the prioritised sectors and to recommend local content incentives and Government support measures.
Both the private sector and Government are agreed on the urgent need to close the country’s trade gap through import substitution, a measure that is necessitated by concerns over the widening trade deficit in recent years.
According to the Zimbabwe National Statistical Agency (Zimstat), a cumulative trade deficit for the country stands at a staggering $32,15 billion since the adoption of a multi-currency in 2009.
Reducing the trade deficit also entails the promotion of consumption of locally made products and services both at national and international markets.
In this regard, the Minister said more still needs to be done in terms of local production and growing local products market share to enhance import substitution.
Government recently approved the Zimbabwe Industrial Policy Framework, which has three pillars — namely; innovation, export-led industrialisation and investment.
In line with the implementation of the Zimbabwe National Industrial Development Policy (ZNIDP), Minister Ndlovu said sector strategies will be developed with focus on rural industrialisation and hence the use of the Local Content Strategy.
Buy Zimbabwe chairperson, Dr Anxious Masuka, said import substitution would greatly benefit local businesses in sectors such as agriculture, manufacturing, construction, infrastructure, mining, tourism, banking, ICT, and public procurement among others.
He said Buy Zimbabwe will continue to promote, deepen and broaden the utilisation of locally sourced and produced resources to yield quality and globally competitive Zimbabwean brands for sustainable economic development.
“Local companies should therefore, see the Local Content Strategy as a tool that will boost local production and consumption to reduce the trade imbalance. It is high time we took advantage of this Local Content Strategy to utilise our locally available raw materials in local production,” he said.
“Undoubtedly, Zimbabwe can benefit too as it has abundant raw materials, and this should propel the country to become a upper middle income economy by 2030.”
The LCS is seen as one of the critical economic tools having been implemented in other resources-rich countries where it yielded positive results. Hopes are high that it can also yield the same good results in Zimbabwe.
The implementation of the LCS is also set to unlock value addition and beneficiation of local resources leading to employment creation, economic empowerment as well as trade and fiscal expansion in line with the Transitional Stabilisation Programme (TSP), which prioritises the stimulation of economic growth, creation of employment and macro-economic stability.
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