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Sugar imports decline boost Zimbabwe producers

Memory MataranyikaMemory Mataranyika

Harare - Sugar imports into Zimbabwe have significantly declined, giving ZSE listed Hippo Valley Estates and Triangle Sugar Corporation a major market boost although other experts say imports of some commodities into Zimbabwe are still necessary given the country’s low manufacturing base.

Industry and Commerce Minister, Mike Bimha last year pushed for import restrictions on some goods and products. The government has also this month started to levy VAT on products such as meat, rice and other products that were not previously charged VAT, adding to the cost of locally produced goods.

This is now expected further stretch the competitiveness of locally produced goods against those imported from countries such as Zambia, South Africa and Namibia. Experts say “given large imports, there are local agents used by supermarkets” and these include Brands Africa and Vital Logistics.

But Adelaide Chikunguru, spokesperson for Tongaat Hulett’s sugar producing units in Zimbabwe – Hippo Valley and Triangle – said by email that competition from imported sugar products has declined.

The risk faced of sugar imports has been significantly reduced due to the removal of sugar from the Open General Import Licence List,” said Chikunguru.

Although the Zimbabwean manufacturers drummed up support for the imposition of the import restrictions, most of them are still hamstrung by operational constraints such as liquidity shortages, power outtages and surging tax burdens.

The Confederation of Zimbabwe Industries wants the government to adopt usage of the rand in Zimbabwe to offset a biting dollar crunch. Following the hard currency shortages, Zimbabwe has introduced bond notes but this has also started to push up prices in recent weeks.

The major threat to formal manufacturers and retailers in Zimbabwe is a thriving informal sector. Reena das Nair and Shingie Chisoro said in a research paper released by the United Nations University this month that “the informal sector further remains alive with numerous vendors operating within supermarket catchment areas” in Zimbabwe.

“At low levels of manufacturing capacity, imports of food and household consumables are necessary to satisfy local demand. The persistent poor agricultural performance has seen Zimbabwe becoming a net food importer, especially of maize and other cereals,” said the paper.

Major supermarkets in Zimbabwe, including TM/Pick N Pay, OK Zimbabwe, Food World and Spar among smaller others have started to stock up with locally manufactured goods. However, a snap survey of most outlets in Harare showed that some imported products are still dominant on the shop shelves.