Some times
governments have to make rough decisions for the interests of the nation. In fact,
one can argue that populism has been one of the most destructive philosophies
of many post- independence African States. So well-meaning and stable
governments sometimes do have to sacrifice current popularity by making tough
decisions to move a country forward.
One of the
most seemingly unpopular but noble decisions made by the Government of Zimbabwe
was to promulgate Statutory Instrument 64 of 2016 (SI 64/2016) which restricted
the amount and kind of goods one could import. This was meant to protect local
industries from being suffocated by cheap imported products from the region. This
did not only affect ordinary folks in Zimbabwe surviving on cross-border
trading, it sent shock waves in the region.
Domestically
there were disturbances in Beit Bridge and murmurs on the streets. To make the
argument for the government position was the panic in South Africa. They were
very clear that jobs are going to be lost. Closer to the border they expect
much more than 1000 jobs to be lost. Even in Malawi the government had to
discuss the impact of SI/2016 on their export volumes. Malawi started reviewing
its export policy to Zimbabwe in light of this. The whole region is seized with
the matter right now. Zimbabweans never realised that they had such buying
power to cause such trade turmoil in the region. All things being equal the
government can rest its case in as far as the logic behind the ban is
concerned.
But not all
things are equal, are they? There is massive unemployment in Zimbabwe and a lot
relied on selling imports to earn or augment their income. The people are
saying that they are being stopped from earning an honesty living. What are
they supposed to do now? They accuse the government of being heartless and
preferring capitalists against to its own people. The government rebuts by
saying it is with employment of the people
in mind that it tries to protect their jobs by protecting local
industry. This is a classic Catch 22 situation for the government and the
people themselves.
There is no
doubt that imports seriously injure industry and the reaction in the region
vindicates that. To curtail imports the government had two tools. Either to give
subsidies to local industries or restrict imports. The answer to that was a no
brainer. Struggling with fiscal space took the subsidy option off the table.
This left the import restriction as the only option. It made its choice putting
itself in a no-win conundrum. What is it going to do with the people whose
livelihoods is affected by SI 64/2016, when it has an impossible unemployment
rate as well as a need to reduce the civil service?
It has to be
understood that there is likely to be an all round increase in industrial
output as commercial demand for the products from the protected industry increase
but the results is not assured. There is also the risk that demand towards
local products would result in fatcat bosses using the extra cash for higher
salaries and allowances instead of increasing employment and improvement in
quality of the products themselves. The industries benefitting from this should
be monitored because the whole population cannot make sacrifices for fatcats.
Another angle that would restrict demand of the local product is the Income Factor.
With Made in Zimbabwe goods being so expensive and imports not coming in,
consumers might just do away with the use of those goods since they just cannot
afford them because of low incomes. That would not benefit industry as well.
Some unscrupulous traders will also increase their prices because of the
restricted competition and make the consumer suffer more whilst doing nothing for
employment. So it is incumbent upon industry to also revisit its margins.
Most
executives of these companies live profligate lives. Somebody has to pay for
that. They then escalate the price of their products and the market resist by
going to buy next door. Now that they have been protected they should take this
opportunity to make their processes more mature so that the anticipated
increased revenue from the protected market would not be used for executive
largess.
Vice President
ED Mnangagwa raised the debate of Protectionism versus free trade to a
different level by saying that the Import Control measures were temporary. He
went further to suggest that Free Trade helps to increase the quality and
efficiency of local industries as they up their game in order to survive
against steep competition from across the borders. However, during its infancy, the local
industry would need to be nursed. Like a child it has to be protected until it
gets enough maturity to run and compete on its own. But when it comes to Zimbabwe
the question is when will that be? What is the roadmap?
This
columnist swears by the Buy Zimbabwe mantra but that should not turn lazy to
innovate or lazy to think industrialists into Cry Babies. A few months ago
spoiled mobile companies in Zimbabwe were asking the government to ban
platforms such as WhatsApp. Not for facilitating the sending of incendiary or subversive
messages. It was for reducing their call time and text revenue. Instead of
innovating and come up with products to increase their revenue all they wanted
was protection so they could just “chill” and milk it. Their approach made them
deserve the Title “Enemies of Progress”. So our industries should also not
remain babies needing nursing and cuddling forever.
This is not
a crusade against neoliberalism. It is part of sovereignty that a nation should
always protect its citizens above foreigners in a lot of issues. But protection
of own citizens includes protection of the corporate citizens. The tendering system is said to favour locals.
But there have been reported cases of substandard bitumen emulsion being
imported to be used in civil contracts such as road construction when local
companies who do that product should be capacitated and this is locally bought.
Focus should on this cash intensive imports more than on domestic groceries. Some of the groceries which are bought by
individual vendors do not make a big dent on the market even if collectively
aggregated. It’s just a minor ripple which is just enough to provide someone
with a livelihood. But big purchase including furniture, electronic equipment,
housing decorations in the in the palaces of the non-duty paying elite should
also be looked at for this policy to have any purchase with the people.
The
argument is, if Zimbabwe industry booms, then Zimbabweans will move from the
informal sector into formal employment. They would use hard earned degrees for
a living. Possibly those degrees do not
include a Bachelor in Vendor Studies. This formalisation of Zimbabwe’s economy
will take long. Import restrictions while part of the solution is not a silver
bullet. It is a well meant policy which is struggling to gain attractive
influence because the people are worried about the here and now and not some
anticipated increased employment in an undefined future. When folks are desperate,
it becomes about now. What is my child eating tonight? Where is my next rent
coming from and what do I do about my daughter’s ripped school uniforms now? So
a national increase in industrial productivity is not an immediate need to give
a second thought.
Whilst this mind-set is not ideal, it is real.
So the policy makers who are making all these rules in good faith should also
factor that someone will not wait for tomorrow when they can’t survive today.
The accusation out here is that because of the immediacy of the need to survive
everyone including government is in a crisis management mode. Government is
accused of making knee jerk jerk policies without a thorough impact analyses
which includes grassroots consultation. With some of the perceived volte faces
the nation sees, there is some credence in the accusation.
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