Govt urged to deal with smuggling scam

Business Correspondent
THE local manufacturing industry has called on the Government to deal with a smuggling scam where goods from Far Eastern countries are brought to neighbouring countries, changed labels of origin, before being brought into the country duty free. Zimplow group chief executive officer, Mr Zondi Kumwenda, challenged the Government to monitor goods coming into the country to prevent smuggling as this affected the local manufacturing industry.

“Not all trade protocols are bad but there has been serious abuse of the Sadc certificate of origin where goods from China are “originating from RSA.” Goods from the East are brought into South Africa and put labels that they were manufactured there in South Africa so that they can enter our country with a lower duty. This has to be stopped by putting serious anti-dumping tariffs,” he said last week at the Confederation of Zimbabwe Industries (CZI) annual congress held in Bulawayo.

Mr Kumwenda said there was a need to tighten the porous local borders and sniff out corruption at the country’s entry points.
“Our borders are very porous in one direction, that is, into the country. Corruption is rampant and that needs to be stopped,” said Mr Kumwenda in a presentation titled “Imperatives for Reversing De-Industrialisation.”

He said in order to revive the local industry, there was a need to identify strategic areas where the country had significant comparative advantage and focus on those, like in agriculture and mining.

“To revive our industry, there is also a need for an exemption from import duties on key raw materials not found in Zimbabwe.New companies should be established in areas where the public sector lacks expertise, such as Air Zimbabwe, National Railway of Zimbabwe and so on,” he said.

Mr Kumwenda also bemoaned the labour costs in Zimbabwe which he said were high and were affecting the viability of the local industry.
“We need to introduce wage correction policies. Our minimum wages are very high compared to the region,” he said.

He reiterated the need to concentrate using labour on high value addition industries.
Mr Kumwenda said most companies were heavily undercapitalised and needed heavy capital injection in the form of Foreign Direct Investment (FDI).

“We need FDI and we need to engage the multilateral financial institutions. Capital formation is needed,” said Mr Kumwenda.