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Prosper Ndlovu in Victoria Falls—
THE ballooning trade deficit dominated the Buy Zimbabwe Summit here yesterday with economists making an impassioned plea for consumers to substitute imports with local products so as to stimulate domestic growth. There were candid contributions that demanded a reality check on the part of government, businesses and individual consumers’ role in ending the import syndrome that continues to negate any gains made towards economic progress.
Zimbabwe battles a perennial current account deficit with imports topping an average $7 billion compared to about $3 billion exports that are mainly in raw form.
A trade deficit occurs when the country imports more than it exports.
Contributing during discussions at the summit, Confederation of Zimbabwe Industries (CZI) vice-president, Sifelani Jabangwe said the country needs to urgently harness the role of markets to stimulate industrial production.
“With $7 billion imports, Zimbabwe is definitely not a bankrupt country. The problem is that we’ve started importing what we used to produce.
“Industry exists when there’s demand and we’re killing our own industry with imports,” Jabangwe said.
“We need vibrant local consumption to stimulate industrial activity.”
During deliberations on imports, it emerged that Zimbabwe has recorded a cumulative trade deficit of up to $18 billion since 2011. Out of an estimated annual trade deficit of $3,5 billion, about $2 billion of the amount involves importation of consumptive products and procurement shortcomings.
According to Buy Zimbabwe Company chief executive officer, Munyaradzi Hwengwere confectionary products such as bread and cakes accounted for $60 million worth of imports in 2014 alone.
Vegetable products accounted for $10 million imports while fruit juices averaged $12 million per year with water imports gobbling about $22 million.
Sugar imports came to an average of $100 million per year while soap products accounted for $62 million with beauty and make up products gobbling about $90 million.
Vehicle imports alone take an average of $789 million per year out of the country.
“Most imports are not going to productive use but are mainly consumptive,” said Hwengwere.
Jabangwe, however, said the country was on the right track in terms of developing its industry as evidenced by gains made in the goods sector in particular.
He alluded to growth in milling, poultry, edible oils and dairy industries, which he said had managed to break even and need increased support from the local market.
Jabangwe said huge potential resides in developing the pharmaceutical industry — both medical and body care, clothing and packaging, transport and canned foods, print industry as well as engineering machinery and spare parts.
He said these industries have a quick turn-around economic effect and would create more job opportunities if given adequate support.
The CZI boss called for the adoption of business to business marketing approaches and exploitation of linkages between different enterprises. He said major industries such as manufacturing, mining and tourism, could achieve more if they worked and supported each other.
Other participants demanded an end to leakages and challenged the government to lead by example in its procurement system. They said the continued reliance on imports was responsible for job cuts and the dearth of local manufacturing firms.
Online Reporter