Discussions
Traders demonstrate against new Zimbabwe import regulations
Elisha Tshuma, Customs and Trade Facilitation Expert, comments on the protests at Beitbridge border post in response to the government’s new import regulations
The Government of Zimbabwe has extended its list of goods requiring an import license. This was done under Statutory Instrument 64 of 2016 which can be accessed here. Some of the goods include coffee creamers (cremora), camphor creams, body creams, plastics pipes and fittings, buidersware products, metal clad insulated panels, baked beans, cereals, fertilizers, flash doors, beds, wardrobes, bedroom and dining suites, office furniture and woven fabrics of cotton among many others. The Government has in the past introduced import controls on products such as cooking oil, mealie meal, cooking oil, and plastic packaging material and these are still in force. The reason given for removing the goods from an Open General Import Licence (OGIL) was to protect local industry and control the ever increasing import bill. According to Kipson Gundani who is the Chief Economist at The Buy Zimbabwe Campaign, “the country could not continue with this huge import bill driven by extravagance, some policy shock in the market was overdue, and the Minister has done an appropriate response”.
However, the regulations were introduced without any notice. The Zimbabwe Revenue Authority (ZIMRA) Regional manager for Beitbridge, Batsirai Chadzingwa advised clearing agents in an e-mail dated 19 June 2016 to “Please take note of the attached SI which was gazetted last Friday meaning that the effective date of implementation was last Friday. The SI is removing a number of items from OGIL. Any clarifications on the attached SI must be referred to Ministry of Industry and Commerce. May you please note and pass on the information to our importing clients”. As a result both private and commercial importers were caught unaware. Goods which were in transit to Zimbabwe and which were already at the border posts were affected. The import license is required despite the quantity or value of items being imported. On average it takes not less than seven (7) days to obtain an import license. The Zimbabwe Revenue Authority enforces this requirement on behalf of the Ministry of Industry and Commerce.
On Saturday 18 June 2016, shoppers and cross border traders who were caught unaware of the new regulations held noisy demonstration at Beitbridge border post against the implementation of the new regulations. ZIMRA was forced to allow these traders to cross the border after payment of customs duty but without the import license. However, commercial importations were being affected.
After representations from the organisations such as the Shipping and Forwarding Agents Association of Zimbabwe (SFAAZ), the Ministry of Industry and Commerce has started issuing import licenses for goods which were purchased before the Statutory Instrument was made and for consignments which were already at the border posts. Importers will need to submit evidence that the goods were purchased before the Statutory Instrument was gazetted. For fresh purchases, importers will need to justify why they are importing the goods instead of buying locally produced goods. The consignments which have been stuck at the border posts since the expansion of the controlled goods list will now incur more transportation costs due to increased demurrage charges as they have spent more time in transit than originally budgeted for. Increased transportation costs will definitely be passed on to consumers. Life is becoming more difficult for Zimbabwean importers as they have to comply with Consignment Based Conformity Assessment (CBCA) which was introduced last year and the new requirement for import licenses. Both of them are not for free.
According to the Minister of Industry and Commerce, the measure is not a ban of imports and is of a temporary nature. However, the process of getting the permits is quite frustrating and time consuming. While the Minister argues that the measure is of a temporary nature the picture on the ground reflects otherwise. Zimbabwe has been increasing import controls over the years with no sign of easing them. These include the introduction and increase of surtax in 2012 whose rate is now 35%, removal of many items from travellers rebate, increase in rates of duty and introduction import licences on more than 60% of Zimbabwean imports. Last year it introduced the CBCA. Despite all these measures, local companies continue to shut down and the import bill continues to grow.
While the Government explained that the move was taken to protect the local industry and reduce the import bill, the author believes that the number one enemy in Zimbabwe is the high levels of corruption in public institutions such as ZESA, Netone and ZIMRA among others. No day passes without a report on scandals in the press. Local companies cannot compete because the cost of production is higher than their competitors in the region and beyond. The high cost of production is partly due to cost of corruption. Industry is made to subsidies corruption. Corruption chases away foreign investors and no one can lend money to a country where corruption has become a culture of doing business.
South Africa is the country that will be greatly affected by measures taken by Zimbabwe as it is the largest trading partner with Zimbabwe.
UPDATE: Following a meeting between the Chairman of the Shipping and Forwarding Agents’ Association of Zimbabwe (SFAAZ) and the Director of Enterprise Development at the Ministry of Industry and Commerce on 22 June 2016, the above-mentioned regulations have not been suspended and are being enforced on all cargo that require import licences at the borders or airports.
Click here to view a letter to the members of SFAAZ following the meeting with the Ministry of Industry and Commerce.
Click here to view the guidelines issued by the Ministry for application for import licenses.