HomeBusiness Digest50% local content policy for retailers on the cards

50% local content policy for retailers on the cards

LOCAL industry and government are in discussions over the formulation of a policy which, if approved, will compel that at least half of all the stock sold by retailers should consist of locally manufactured products, businessdigest can reveal.

Hazel Ndebele

This comes as local industry continues on a free fall due to a host of operational challenges, including the influx of cheap and at times substandard imports, which has seen local manufacturing firms’ capacity utilisation falling to below 40% in the current year.

Sources close to the developments said while some in industry wanted to see more local products in retail outlets, so far agreement had been reached that 50% would be a good start. Industry and Commerce minister Mike Bimha confirmed that the local product initiative was underway but would not be drawn into specifying the proposed minimum local percentage.

He also confirmed his ministry, together with that of Finance and Economic Planning had already held consultations with different stakeholders regarding the issue.

“We have already done our consultations with the private sector and various companies which are involved and we have their opinions. We have our officials who have been meeting and our discussions are mainly to look at this issue in a holistic perspective,” Bimha said.
“We still have to discuss which particular products we should target and on the sequencing, whether it should be something that we will announce immediately or in the long-term,” he added.

Buy Zimbabwe general manager Munyaradzi Hwengwere said for the local economy to thrive, it should have at least 50% of Zimbabwean products in the retail outlets. Those who advocated for a higher local products percentage include Anchor Yeast chief operations officer Muvirimi Kupara who advocated for as much as 75% local products.

“The government can work with industry, for instance and say this year we start at a mandatory 25% local products, increasing it from time to time till we reach 75% local products and 25% imports to keep us on our feet,” he said.

At a Buy Zimbabwe Retail Chain Suppliers conference last week, OK Zimbabwe (OK) chief operations officer Albert Katsande said OK currently stocked 65% imported and 35% local products. He said retailers did not choose to import, had no choice but were forced to because local suppliers were not consistent as they sometimes lacked product on demand due to power cuts and water shortages, or even faulty machinery.

Katsande, however, said his company would support a 100% local product policy, if relevant industries worked together with the government to lift production.

“Quality and standards of local products let us down and this leads to inferior products, which is why imports are sometimes preferable.

We are getting left behind in technology, packaging, flavours and variants. Therefore our suppliers should work on that,” said Katsande
As for fruits and vegetables, local farmers had to specialise to create economies of scale and improve the supporting industries, for example manufacturing and distribution, the OK COO added. He urged government to help farmers increase productivity.

“Small-scale farmers need to be educated on the need for quality, grading standards, packaging requirements and reliability of supply. One issue is that a group of farmers would all plant the same crop at the same time, resulting in a temporary glut when the crop is harvested,” Katsande said.

Recent Posts

Stories you will enjoy

Recommended reading