adminOliver Kazunga Senior Business Reporter
THE Competition and Tariff Commission (CTC) says the depressed economic performance has seen Zimbabwe failing to adhere to key Sadc protocols on trade related tariff reduction.
The phasing-down of tariffs was supposed to commence in 2009 and end in 2012.
Although the country recorded economic stability soon after the adoption of a multi-currency system in February 2009, the local manufacturing sector was still grappling to improve capacity utilisation to competitive levels as challenges faced by the country remain unabated resulting in the failure to adhere to the regional protocol.
The Confederation of Zimbabwe Industries (CZI) has said capacity utilisation in the manufacturing sector is at 39,6 percent largely due to a liquidity crisis, influx of cheap imported products and use of outdated technology by local firms.
Under the Sadc Protocol on Trade, tariff phase down for sensitive products classified in Category C, member states agreed to reduce tariffs for goods in four categories, depending on the degree of sensitivity of the goods.
Products under C category range from cement, sugar, matches, ceramic products, soap, fish or crustaceans, paper to electrical machinery, among others.
The criteria for sensitivity includes factors such as revenue generation, employment creation and strategic importance, among others.
In a statement yesterday, the CTC indicated that it was carrying out consultations with the manufacturing sector under the Sadc Protocol on Trade, with a view to initiating a tariff phase down for sensitive products classified under category C.
“Zimbabwe phased down its tariffs for categories A and B, constituting 87 percent of tariff lines. The commission intends to carry out consultations with industry to gather inputs that would inform the way forward with regard to whether or not to apply for further derogation for category C,” it said.
The commission said any sector affected and intending to apply for further derogation would need to submit stipulated information from a sectorial perspective.
Zimbabwe applied for derogation from implementing the phase down pursuant to the Sadc Trade Protocol.
The derogation entailed that the country would suspend phasing down its tariffs for category C products until 2012 after which yearly reductions would resume and be completed by 2014.
Economic analyst, Chris Mlilo said industry was likely to prefer a further derogation in light of the continued existence of economic challenges that have seen the economy underperforming.
“The local manufacturing sector is likely to seek a further derogation owing to persistent challenges facing the economy,” he said.
Online Reporter