Emmerson Njanjamangezi, Group Features Editor 
BUSINESS says the removal of import controls is promoting excessive hoarding of cheaper basic goods from abroad, amid speculation that the controls might be re-imposed soon this year.
Last month, the minister of Finance, Mthuli Ncube, suspended import duty and import value-added tax on 11 basic grocery items.
In a position paper on the measure, the Zimbabwe National Chamber of Commerce (ZNCC) urged the government to consider the lifting of import controls on basic commodities.
“Our plea is that the government of Zimbabwe, through the ministry of Finance and Economic Development, reverses the lifting of the import restrictions on basic commodities.
Finance Minister, Mthuli Ncube
“Our views are that if restrictions on imports are to be removed on any product, they should be done in a gradual manner and on a case-by-case basis, informed by facts, as opposed to a blanket and sudden removal of import controls.
“There is a need to balance between protecting local industry and consumer welfare. In the event that authorities decide to maintain the current stance, they should however, seriously consider also giving tax incentives to local producers of basic commodities, to even the playing field.”
ZNCC said the hoarding of commodities for future supply will result in a long-term supply of imported goods that will continue to affect the local industry for a longer period of time.
“This will render useless some of the tools that were spelt out to promote industrialisation in the Zimbabwe Industrialisation Development Policy.
“The excessive hoarding will also worsen the demand for foreign currency. The demand for foreign currency will further increase by at least 25 percent as households will also be chasing the greenback to import basic commodities duty/tariff-free, and taking advantage of the weakening Rand and South Africa being Zimbabwe’s largest import market.
“The move will therefore, promote deeper dollarisation which can affect exports.
“The import bill will rise unsustainably, and further widen the trade deficit by at least 10 percent higher than the previous year, as exports are expected to decline as the Rand weakens,” read parts of the ZNCC statement.
According to ZNCC, the current 80 percent shelf space of local goods is likely to shrink as local capacity utilisation is forced to decline to levels of around 50 percent.
“The informal sector is the biggest winner simply because they don’t play by the rules. They can import and sell in foreign currency, while the other formal players are forced to sell in local currency at a rate that does not allow them to acquire enough foreign currency to restock.
“As the need for foreign currency is further heightened, pressures are exacerbated on the Zimbabwean dollar to deteriorate further. US dollar prices on the informal sector will remain unchanged or even go down, while on the formal market, ZWL quoted prices will continue to rise by at least 10 percent on a monthly basis,” further read the ZNCC statement.
The business-member organisation said through the auction system, the government has been giving priority to productive sectors such as manufacturers to become competitive, and there have been signs of improvement.
“However, by removing import controls, and exposing those prioritized sectors to unfair competition, it reverses the gains hitherto accrued. There is a need to reconcile the two goals to align.
“Even when the controls are returned later, they will have no effect as the hoarded supplies will continue to be distributed and pose serious competition to local producers.
“For example, when the SI 98 of 2022 expired in November 2022, some warehouses were still filled with goods that could supply the informal and formal sector for the next three to four months,” further read the ZNCC paper.
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