TRADE: South African Imports Filling Zimbabwean Shop ShelvesHeadlines, South Africa, South-South, Trade and Development Friday, February 25th, 2011
By Ignatius Banda
BULAWAYO, Zimbabwe, Feb 25, 2011 (IPS) – When the government of national unity (GNU) was formed two years ago, Zimbabweans expected that the days of shop shelves being filled with imported consumer goods would soon be over.
During the political turmoil of the past decade, cross-border traders thrived on the back of the shortages of basic commodities. Local manufacturers battled price controls and prohibitive production costs that forced mass factory closures and worker redundancy.
Zimbabweans hoped that, once political rivals ZANU-PF and the MDC formed a GNU, economic reconstruction would help local industries to function again.
Two years on, amid glaring policy differences between the GNU partners concerning how best to revive the economy, consumer goods imported from neighbouring countries, especially South Africa, continue to dominate on supermarket shelves.
Consumers still favour cheaper imported foodstuffs such as cooking oil, maize meal, flour and tea.
In a country afflicted by political thuggery that caused massive capital flight, analysts regard the lack of re-capitalisation as the major bane of local manufacturers.
Finance minister Tendai Biti announced in 2010 that government had set aside 75 million dollars through the African Export-Import Bank for local manufacturers to boost production.
But industrialists complain that the funds are yet to be released to local banks.
For a large-scale trader such as Nomusa Xaba, local industry’s inability to supply major supermarkets has been a godsend.
For years Xaba has run a lucrative outfit sourcing basic commodities in neighbouring South Africa and selling these to local supermarkets and retailers seeking to evade taxes and levies that come with importing the goods themselves.
“For me it has been business as usual since the formation of the unity government as some shops still only sell imported goods,” Xaba told IPS. “People complain that local goods remain expensive. They prefer South African products, ranging from chicken to beer.”
Zimbabweans have long struggled to purchase basic commodities, to such an extent that expatriates living in South Africa send groceries instead of cash remittances.
Cross-border transporters known as “omalayitsha”, who deliver consumer goods and groceries from South Africa, remain popular here — despite predictions that economic changes wrought by the GNU would push this sector out of business.
“I think it is all about how much people can afford,” says Bulawayo-based economist Tony Nyandoro. ”Local manufacturers have cried that they are being crippled by imports but it will be noted that even in the absence of these imports, they fail to supply the local market,” Nyandoro argues.
Poultry producers, for example, have in the past lobbied the government to ban chicken imports from neighbouring countries, especially South Africa. Last year, government instituted such a ban, only to lift it after an outcry from consumers.
After the ban was lifted, demand for South African chicken shot up as local producers could not keep up, especially in the run-up to Christmas.
Before the GNU took power, the then ruling ZANU-PF government was accused of allowing Nigerians and Chinese too easily into the country. ZANU- PF then started with the “indigenisation” of the economy. Government officials have insisted that imported food is not good for people’s health.
Critics say without any government commitment to attracting foreign direct investment in local entities, consumers can expect imports to fill shop shelves for a long time to come.
“There are many policy contradictions here. The government cannot encourage local production when, at the same time, local businesses say they are not fully capitalised.
“Such capitalisation can only come from outside investors with capital. How do we balance the two?” wonders Tendai Chikaraka, who works as an economic analyst with an international bank.
“If local producers are to contribute to economic reconstruction, they surely need partners. It has already been shown that Zimbabweans cannot revitalise this economy on their own,” Chikaraka told IPS.
Foreign-owned shops also continue to flourish in downtown Bulawayo, despite moves by ZANU-PF to push them out. The foreigners who spoke to IPS report that they are there because locals keep buying their cheap goods.
“We cannot just leave because some people think we are benefitting in their place.
“Our goods are affordable simply because the economy was opened up to us when no one else imagined this country would be using foreign currency,” one Nigerian shop–owner told IPS, referring to the legalisation of the use of foreign currencies in Zimbabwe in 2009.
“People must understand that business is about providing the best goods and services. We will keep on bringing goods into the country,” he says. (END)
Short URL: http://www.ibsanews.com/?p=1231