CZI scrambles to rescue importers

CZI scrambles to rescue importers

CZI chief executive officer, Clifford Sileya

THE Confederation of Zimbabwe Industries (CZI) is trying to resolve a crisis that has affected importers since government introduced a pre-shipment system at the beginning of this month to control the import of substandard goods into the country.
Freight and logistics industry players said many importers had their goods held at ports of entry since the new measures came into effect.
CZI chief executive officer, Clifford Sileya, has asked members to explain the nature of problems they have encountered since the system started, after goods destined for Zimbabwe were held at the borders as importers failed comply with the new requirements.
The developments pointed to a potential crisis ahead.
The goods held at the borders range from industrial spares to foods and other critical products.
The crisis started after a Statutory Instrument (SI) compelling importers to present their goods for a pre-shipment inspection, at a cost of between US$250 and US$7 500, came into effect on March 1.
Importers would be required to pay inspection fees to Bureau Veritas, the French company appointed by government to carry out the consignment-based conformity assessment.
In a letter to members, the CZI boss confirmed that importers were in crisis.
“Prior to that, all imported goods were required to be issued with a transitional certificate,” said Sileya, in the internal communication seen by the Financial Gazette’s Companies & Markets.
“There now appears to be a problem of goods which arrived at the border after 01 March, 2016 without a transitional certificate; and there are reports that these are not being allowed into the country. If you are one of those caught up in this situation, please give us the name of your company (and) goods involved…With this information, CZI will try to intercede on your behalf,” he added.
Ahead of the implementation of the new system, economists and business leaders had predicted a crisis.
They had also warned the market to brace for price hikes as this additional cost would be passed to the consumer.
Zimbabwe National Chamber of Commerce chief executive officer, Christopher Mugaga, said with rampant smuggling of goods at the country’s ports of entry, it would be difficult to compel importers to present their goods for inspection without creating excuses for them to evade payment of duty.
But the new system would add costs to imports already being charged duties which are among the world’s highest, making life for consumers already battling to find money for the most basic commodities even more difficult.
Kingston Khanyile, chief executive officer at Mtilikwe Financial Services, said the SI was meant to mitigate dumping of substandard goods.
“It’s a commendable move by government. The cost is minimal and there will be a marginal increase of prices but that will not stop the demand for imports,” he said.
SI 132 of 2015, gazetted on December 18 last year, says in some instances, the Minister of Industry and Commerce would use his discretion on whether to exempt some imports or not. The SI has caused anxiety in industry, which feels that there have not been enough consultations on the policy.
Meetings were held with several lobby groups to discuss the effects of the SI, with some saying they feared that goods in transit could also be subjected to the new fees, in violation of existing trade protocols.
Analysts said additional fees on imports could also trigger high levels of smuggling as thousands of people who have lost their jobs in the past 16 years have turned to cross border trading, where they import anything to make ends meet.

Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette

Connect With Us

Fingaz Polls

Can the rand rescue Zimbabwe’s economy?