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Bulawayo Bureau
LOCAL industries are calling for urgent Government intervention to address the issue of unfairly low prices offered by informal businesses and smuggled goods.
The informal sector may be a global reality, but its unregulated nature presents numerous challenges to formal businesses.
By operating outside the legal framework, informal businesses are able to avoid taxes, regulations and labour costs – giving them an unfair advantage over registered businesses that comply with regulations and bear higher operating costs.
As a result, the latter find it increasingly difficult to remain competitive in the market.
During a stakeholder review workshop on the Consignment-Based Conformity Assessment (CBCA) programme, held in Bulawayo on Friday, the Confederation of Zimbabwe Industries (CZI) Matabeleland Chamber president, Mr Stephen Ncube, expressed support for the CBCA programme, but urged the Government to address certain issues that could affect registered businesses.
Mr Ncube specifically cited the cost of compliance and the turnaround time for certification as two factors that need urgent attention.
“The CBCA programme, which commenced in 2015, is a good programme as it is meant to protect local industry from the importation of hazardous and substandard products.
“But the challenge we are now facing is the cost of compliance, the turnaround time to get the certificate of conformity, and the porous border posts.
“We think that the scheme only applies to the formal sector because there are a lot of smuggled goods being brought in by the informal sector without any certificate of conformity,” said Mr Ncube.
Mr Ncube urged the Government to impose tighter control on border posts, saying it would save the industry.
He also said reducing the cost of compliance would improve the competitiveness of local products, allowing local industries to benefit from the African Continental Free Trade Area. Under the CBCA programme, all products regulated by the Ministry of Industry and Commerce imported into Zimbabwe are expected to be accompanied by a CBCA certificate.
Responding to industry’s requests, Industry and Commerce Minister, Mangaliso Ndlovu, said the country is battling informalisation, with the sector being illegal and lacking mechanisms to enforce compliance with standards, which could expose consumers to harmful products.
He also noted that the sector is not contributing to the fiscus and the Government has put in place mechanisms to address the porous border posts.
“We will be intensifying our inspections. People who sell imported products will have to show paperwork on how the goods got here, so there will be a lot of movement, inter-agency, inter-departmental unity, spearheaded by our Department of Commerce, but involving Home Affairs, Immigration, ZIMRA, and all the critical stakeholders.
“The idea is that if you are selling imported products, you need to show where you purchased them. ]”If you purchased them locally, we should trace that and be able to get to the people who are bringing these goods into the country.
“You find people placing a grocery container in the form of a formal business, while they are selling exclusively in US dollars.
“They afford crazy discounts because they are not complying with any regulatory fees, making these formal businesses face unfair competition,” said Minister Ndlovu.
The Minister also said there will be increased surveillance of illegal ports of entry, noting that people are so daring to open their own roads for trucks to use, avoiding formal routes.
He said the Government welcomes feedback from the private sector as it helps address issues affecting them.
In February this year, the Ministry of Industry and Commerce revealed that 155 million units of substandard products had been rejected by Zimbabwe since the implementation of the CBCA programme in 2015, enabling the country to reduce the influx of hazardous and suboptimal products locally.
The Government engaged the services of a French-based global standards firm, Bureau Veritas, to carry out consignment-based assessments of imported products before shipment or upon arrival in the country.
The number of companies offering conformity assessment increased to four after the Government roped in EAA Company of Japan, Standards Association of Zimbabwe, and Cotecna Inspection in March 2022.
While the conformity of imported products that entered Zimbabwe before the implementation of the CBCA programme is not known, the initiative is seen as a giant step towards substantially reducing hazardous and substandard imported goods and improving customs duty collection.
The initiative is vitally important as it seeks to protect Zimbabwean consumers against dangerous or suboptimal products and improve the quality of products through applicable standards and regulations.
Online Reporter