Maintain duty on basic goods

represent Government, business and consumers, unanimously agreed to advise the Finance Ministry that the imposition of duty on basic and electrical products should be preserved at this stage.
This was the outcome of the Industrial Task Force meeting held on Tuesday, which was aimed at interrogating the relationship between the new duty policy and the price increases.
This is a sure sign that the country has stakeholders committed to the revitalisation of the economy and subsequent re-industrialisation.

I am, however, a little disturbed by the absence of representation from the retail sector to share their views on the current spate of price increases that have been widely covered in the media.
Allegations of some shop owners to have either removed products from shelves or increased prices unjustifiably in response to the imposition of duty.
It is this same speculative behaviour that caused mayhem in 2007/2008 and created an atmosphere of bitterness between Government and business.

After import duty was restored on August 1 there have been allegations that manufacturers had increased prices, allegations which manufacturers have denied and have over the last few weeks been battling to prove wrong.
Last week I wrote about the Grain Millers’ Association of Zimbabwe who held a Press conference to announce the recommended retail price for 10kg roller meal and I suggested that all other sectors follow suit.

The week before, I produced research results by a leading independent research company, Select Research, which showed that no significant price changes have occurred on local products.
The NIPC and Zimstats also have corroborated that a majority of local producers have either maintained or reduced prices.
In instances where prices of local goods have indeed increased, the increases have been marginal and have been mainly influenced by speculative buying behaviour influenced by Press reports and

the low capacity utilisation by producers most of whom are performing at below 50 percent capacity.
Clearly, what is important here is that we do not confuse issues. When industry called for the re-introduction of duty on finished imports, this was meant to benefit industry, increase capacity utilisation, then create jobs and ensure that the country has a more liquid consumer.
The reinstatement of duty on selected items was obviously bound to result in an increase in the prices of imported goods, but should not have had a direct bearing on prices of locally produced goods.

If we look at the Mid-Term Fiscal Policy Review with suspicion, we will lose sight of the fact that since August 1, over 2000 jobs have been created in the milling industry alone.
I believe that the major challenge the country faces is that of jobs and incomes and not necessarily prices.
If a family of six has two employed adults who earn at least US$250 per month this means that they can afford the consumer basket which was at US$505,21 at the end of last month.

Now, imagine if we take away one job from the two breadwinners of our family of six, this leaves the family at a deficit of over US$350.
If we do not promote our own, the country will have a situation where hundreds or thousands would be left jobless because we prefer to buy imported goods over local products.

In Zimbabwe, job creation and protection needs to be our main focus.
I am in total agreement with the Confederation of Zimbabwe Industries’ view that “the thinking behind the increase in duties was to create a level playing field and protect local industry, in sectors

where production levels have improved significantly and as such are in a position to satisfy local demand”.
I am of the opinion that the Minister of Finance should give industry a chance before dismantling the policy.
It is important that we unlock the value of local industry, big and small, by capacitating the country’s key sectors.

Till next week . . . God bless our nation.