Online Reporter
Business Reporter
BUY ZIMBABWE has called for changes to the country’s public procurement framework, warning that the current model is fuelling arbitrage instead of promoting domestic production.
Speaking during the third strategic meeting between business membership organisations (BMOs) and the Ministry of Industry and Commerce in Harare last week, Buy Zimbabwe chairperson and chief executive officer Mr Munyaradzi Hwengwere said while Government policy rightly prioritises local companies in tenders, loopholes were undermining the noble initiative.
“Public procurement has done very well to say you must prioritise Zimbabwean entities,” Mr Hwengwere said.
“However, what we have is an open-ended programme. It is not linked to local manufacturers, and that is a problem. If we restructure our procurement and anchor it on industry, we can triple manufacturing growth.”
Under current regulations, a local company can still win a Government contract if its bid is up to 30 percent higher than that of a foreign supplier.
This, Mr Hwengwere said, has created opportunities for local firms that simply import products and resell them.
“What has happened is that we have essentially gone to China via a local person,” he said.
“A Zimbabwean-registered company imports the very same products, slaps on a margin and wins the contract. That is not building industry; it is fuelling arbitrage.”
Industry and Commerce Minister Mangaliso Ndlovu, who chaired the meeting, said the concerns would be taken up with the Procurement Regulatory Authority of Zimbabwe (Praz).
“We have always had positive reactions from Praz,” he said.
“Last time you raised an issue, they acted swiftly. We are going to invite them to the next meeting so that you can engage directly.
“Ours is a listening Government; one that responds to your grievances.”
Industrialist Dr Nxaba Ndiweni sees procurement as a powerful lever for industrial renewal.
“If Government procurement is directly linked to local industry, you unlock consistent demand,” he said.
“This in turn gives manufacturers predictable volumes, which is the basis for investment in new machinery and skills.”
He said Zimbabwe’s manufacturing sector has long been constrained by erratic demand and competition from imports.
“Public procurement can change that equation. If industry knows that every tender for uniforms, pharmaceuticals or fertiliser will be met locally, you create economies of scale. It becomes rational for firms to expand, hire more people and innovate,” he added.
Economist Mrs Gladys Shumbambiri-Mutsopotsi believes that linking procurement to local industry would have a multiplier effect on public finances.
“When local firms produce and supply, tax revenue accrues domestically, not offshore,” she explained.
“That boosts the fiscus, supports social spending and reduces the current account deficit.”
She also warned of the dangers of the current procurement model.
“Procurement that rewards only the registration of a company without checking manufacturing capacity invites rent-seeking,” she said.
“We need mechanisms that eliminate briefcase businesses which simply import and resell. That way, the system supports genuine producers, not intermediaries.”
The Buy Zimbabwe lobby insists that the solution lies not in abandoning preferential procurement, but in refining it.
That could mean requiring firms to demonstrate actual production capacity, setting thresholds for local content or even channelling tenders towards firms that show strong value addition.
Mr Hwengwere is optimistic that such a recalibration could deliver measurable growth.
“If we anchor procurement on industry, manufacturing can multiply by three times,” he said.
Industry players believe that a stronger domestic industrial base reduces reliance on volatile global supply chains, insulates jobs
and aligns procurement with the country’s industrialisation
agenda.
The Government spends billions of dollars annually through public procurement, making it a key instrument for driving industrialisation.
Online Reporter