adminKudzanai Gerede
As Government is set to introduce stringent measures to curb the influx of substandard import products flooding the domestic market through the Consignment Based Conformity Assessment (CBCA) programme with effect from March 1, analysts have applauded the move as a deliberate effort to ensure quality products for local consumers, creating market space for local manufacturers to exploit as well as opening new revenue inflows to Treasury.
The country’s manufacturing sector has been badly crippled by stiff competition from cheap substandard imports dominating the local market which do not meet the same high cost build up at production level endured by locally produced products, a situation which was creating an uneven playing field to our local industries.
The CBCA programme is a five-year interim partnership between government and a French based firm, Bureau Veritas who will offer their technical expertise in the verification of conformity in the country of export prior to shipment of the consignment. It will ensure that all listed imported products meet quality, safety, health and environmental standards in line with World Trade Organisation agreements.
The programme will see consignments which fail to meet the verification standards denied entry into the country and returned to the country of origin at supplier’s cost.
The range of products to be subjected to certification prior to their importation will include medicine and pharmaceuticals, food and agriculture products, clothing and textile, electrical gadgets, petroleum and fuels, body care and automotives and transportation.
The CBCA programme will also see Government revenue streams boosted as the contractor, Bureau Veritas will pay the 5 percent royalties to national coffers and an additional 2 percent that will be channelled towards capacity building of the country’s inspecting agents, ZIMRA and Standards Association of Zimbabwe.
The move comes on the backdrop that Zimbabwe has recently been turned into a dumping ground for most substandard goods a scenario prevalent in most developing countries. Statistics highlight that between five to seven percent of world trade comprises of counterfeit products.
Notably most substandard products have wrongly quoted measurements, poor packaging, short life span of the product and more worryingly poor quality food, medicines and fuel among others which negatively affects the consumers.
Addressing industry stakeholders at CBCA programme awareness campaign workshop in Harare last Monday, Minister of Industry and Commerce, Mike Bimha said quality products had economic benefits and local manufacturers should endeavour to produce quality goods.
“To the industry quality products result in cost savings as quality standards help to optimise operations. Consumer satisfaction is enhanced and thus sales will be increased. Quality products enable a company to increase its productivity and competitive advantage, allowing it to have new markets and at the same time increase its market share,” said the minister.
Zimbabwe’s import bill stood at US$ 6,3 billion against US$ 3,4 billion worth of exports giving a trade deficit of US$ 2,9 billion, a trend highlighting lack of competitiveness of local products which calls for serious introspection.
“This is a good move in a period where the country is struggling against the debilitating effects of a high import bill. A bill that is burgeoning due to a number of factors but principle of which being lack of the country to detect substandard products hence making our country a dumping ground,” notes an economic analyst Mr Kipson Gundani.
The CBCA programme is also expected to bring good news to treasury as it will be a vital instrument in curbing under invoicing which has become synonymous with world trade.
National Economic Competitiveness Forum economist Mr Pepukai Chivore also commends the initiative as it is in line with national policy to ease the means of doing business in the country as the verification process will be done prior to shipment which entails that there will be efficiency at the country’s ports of entry.
“The pre-shipment verification process would facilitate a faster clearance process by eliminating delays caused by the verification performed on arrival at entry points. This is in line with the ease of doing business reforms currently being implemented in Zimbabwe which is aimed at among other things reducing the cost of importing and exporting. Faster clearance reduces the costs of doing business in the country by helping ZIMRA to speed up the removal of consignments at ports,” says Mr Chivore.
However analysts have also expressed concern about the success of the program with regards to the influx of substandard products.
The reservations arise from the ban on second hand clothes into entering the country as stated by Minister of Finance and Economic Planning in the 2015 National budget that was not heeded which saw the continued importation of the clothing bales which up to now still crowd the flea markets across the country.
“Though the measure is noble, it is not sufficient enough to curb the influx of cheap, poor quality imports. Our borders remain very porous, a phenomenon that will negate the noble move,” Mr Gundani notes.
Zimbabwe is believed to have dozens of unofficial entry points with its four neighbouring countries and curbing illegal cross border trading is almost unrealistic. The porous borders cost the country of over US$1 billion dollars annually in smuggled goods from illegal cross border traders.
Analysts have raised concern about the presence of the CBCA programme solely on the country’s points of entry neglecting the domestic market of being flooded by locally manufactured products which will be substandard.
Most SMEs have been blamed for producing substandard products ranging from plain packaging without correct measurement of contents.
The inspection fee charged is also likely to be negatively impact on the country’s reindustrialisation efforts.
While it is justifiable that the 0,05 percent inspection fee charged from the total cost of the consignment will be insignificant for products with a threshold value of US$ 1000 (the minimum value subject to verification), it however balloons into huge amounts in the case of heavy industrial equipment which may cost close to a million dollars to pay that extra charge
Shipping and Forwarding Agents Association of Zimbabwe Chairman Mr Felix Nyaruwanga acknowledged the benefits of the CBCA programme as progressive for both business players and consumers but expressed reservations on the implementation citing duplication of roles by state regulating agencies and the new contractor.
“We have to be short and precise, we are fully behind the initiative as an association because this is for the good of the consuming public to have access to quality products but our worry is the manner it is implemented, the state have its own agencies which deal with respective products, for example fuel quality is regulated by ZERA so I see a replica of duties here and all they need to do is to synchronise their operations,” he added.
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