'Local content for 13 sectors'

Published: 08 August 2017

THE Confederation of Zimbabwe Industries has proposed local content regulations on products or operations of foreign firms in 13 sectors including mining, agriculture, manufacturing, energy and tourism.

CZI president Sifelani Jabangwe said the business grouping supported Government's idea of local content as a long term import management strategy to protect the viability of local industry.

He made the call while addressing delegates at CZI's Annual Congress and International Investment Conference in Victoria Falls last week.

Mr Jabangwe said Norway used LCR to improve state of its industry to a level where domestic supply was 50 to 60 percent of capital inputs, 80 percent of operational inputs and 46 percent of total exports.

"Given that SI 64 only affected 42 tariff lines of the over 10 000 lines that we import the question is how do we strategically select the next lot of products for import management. We are looking at utilising the UNIDO model to prioritise value chains," Mr Jabangwe said.

He said import management was a temporary stop gap measure to give room for industry to retool, increase production, employment and quality levels in order to be able to be competitive on the local market.

"We also appreciate that government is working on minimum content regulations, which is a more sustainable strategy to achieve the same goal as the import management programme," he said.

The local content regulations, which Government is formulating, would form a key part of Government broad industrialisation initiatives and would be considered as "smart" protectionism measures, according to Industry and Commerce Minister Dr Mike Bimha.

The minister said it was a smarter way of protecting and supporting your own industry without necessarily issuing Statutory Instruments compared to the SI 64 of 2016 imposed by the Government last year to restrict imports of goods that can be produced locally.

Mr Jabangwe said CZI's understanding of local content regulations LCR, which are sometimes called Affirmative Procurement Programmes were are programmes which mandate prescribed entities to include a minimum local content in doing business, this may be in the capital phase, operations phase or the maintenance phases of the operation.

CZI wants the LPRs to also apply to public sector and local council tenders and other arms of Government as well as retail, transport, motor trade and assembly, construction, service and health sectors.

Compliance by the Arms of Government for local content regulations will be through the tender process where tender documents should state minimum content thresholds to be achieved to qualify for supply of goods, according to the CZI president.

"Measurement of local content can be used to audit compliance by arms of Government. In South Africa compliance is audited by SABS," he said.

After the promulgation of the SI64, Zimbabwe came under serious attacks particularly from its key trading partners, which felt the Government was closing business on them. South Africa even threatened some retaliatory measures to counter the import restrictions.
- zimpapers

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