ONE of the critical issues needing urgent attention if significant economic recovery is to be achieved in Zimbabwe is import processes and tariffs.
Report by Eric Bloch
Currently, customs duty rates are unrealistic and grossly unrelated to the survival and growth of the economy, whilst the administration of import clearances at Zimbabwe’s borders is similarly negative in relation to economic needs.
The first of the obstacles is the lengthy clearance of imports at Zimbabwe’s border posts; generally it takes many days to obtain the necessary clearances.
Although to some extent this applies to almost all points of entry, delays at Beitbridge border post are exceptionally lengthy, both at the South African exit post and at that for entry into Zimbabwe.
At times there are hundreds of vehicles queuing to be processed. This has been worsened by the recent strike by South African transport workers. This has resulted in a greater than usual number of heavy duty vehicles transporting goods, coming to Zimbabwe after the strike.
The congestion is exacerbated by the hundreds of buses and other passenger transport vehicles transporting Zimbabweans to and from South Africa.
Neither the South African nor Zimbabwe border posts are adequately manned to ensure the expeditious clearance of the many vehicles and their contents.
As a result, many of Zimbabwe’s industries suffer highly prejudicial delays in their operations whilst awaiting the arrival of essential manufacturing inputs, or are forced to reduce volumes of production.
This causes severe operational losses, often resulting in increases in prices on the limited quantities of goods manufactured, with consequential adverse effects upon inflation.
Compounding this quagmire is the plethora of bureaucracy and authorisation requirements by government officials processing the import clearances.
All too often they unjustly challenge the valid contention the imported goods are of Sadc origin, and thereby qualifying for favoured duty rates.
Whilst it is necessary for the officials to be reasonably satisfied as to the validity of importers’ claims as to product origins, since some importers will falsely declare origins which assure lesser import duties, it is also important for the officials not to cause excessive delays in so doing.
There are instances where, notwithstanding comprehensive import documentation, goods have been unjustly impounded for periods ranging from six months to a year.
In respect of other goods, the officials are demanding production of import permits issued by governmental authorities, even in instances where no such permits are prescribed in law.
So frequently do these delays occur that officials, importers become convinced the underlying motivation for the extensive import delays is to solicit bribes.
In some instances the officials are actually inexperienced and unaware of the realities of Zimbabwe’s import laws and regulations, or are blatantly determined to be officious and demonstrate the magnitude of their authority.
Remedying these obstacles requires more comprehensive training of officials, increasing monitoring mechanisms to contain bribery and corruption, and more explicit legislation and underlying regulations.
Also necessary is an effective and swift facility for appeals to higher authority whenever importers believe the determinations or actions of officials at border posts are intentionally of a delaying or other untoward nature, or are giving erroneous duty rulings.
The resolution of the many import constraints at border posts would also be ameliorated to some extent if South Africa and Zimbabwe established “One Stop” border posts as exist between Zambia and the Democratic Republic of Congo, for instance.
A further facet of import-related economic constraints is the structure of Zimbabwe’s customs duty tariffs; hopefully Finance minister Tendai Biti, will recognise and address this in the forthcoming 2013 national budget.
On the one hand, substantive duties are imposed upon diverse manufacturing inputs, thereby constraining the viability of Zimbabwe’s already distressed industrial sector.
Manufacturing materials, consumables spares, and other essential inputs are –– in very many instances –– subject to duties which not only impair further the straitened cash flow resources of industrialists, but also raise the costs of the manufactured goods and, therefore, their selling prices, to levels significantly greater than the landed costs.
Concurrently, it is apparent there are inadequate procedures and controls to minimise smuggling of various foreign manufactured products into Zimbabwe.
It is incomprehensible that flea markets and other vendors are able to sell clothing, manufactured in the Far East at prices lower than the import duties applicable to such products.
This can only be possible if payment of duties on such goods is wholly evaded, and the consequence is gross prejudice to locally-manufactured goods. This results in factory closures, and concomitant reduction in employment and associated economic negatives.
One of the keys to substantive economic recovery is, therefore, that government and the Zimbabwe Revenue Authority urgently revise the processes of import clearances, the expeditious clearance of imports, and the containment of corruption and smuggling.