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Importers struggling to get import licences

It’s 2pm and the sun is scorching hot. The last place anyone would want to be is in a queue at a government office, especially in Zimabwe where customer service in the public sector moves at frustratingly slow pace.

By Fidelity Mhlanga

Two well-dressed middle-aged men are seated in the waiting room of the ministry of Industry and Commerce offices.

Like many others in the room, they were there to apply for an import licence.

“We have been coming here for two weeks,” says one of the men. “And nothing has come.”

After a while, the duo decides to confront the officials.

Frustrated by the poor service, they complain to ministry officials that they have spent the whole day without any assistance.

Since the promulgation of Statutory Instrument 64 of 2016 in June, which restricts imports, the Ministry of Industry and Commerce offices at Mukwati Building have been flooded with people seeking the import licences.

Importers are now required to apply for licences to import specified goods. A visit by the Zimbabwe Independent to the ministry offices showed that importers endure a frustrating back-and-forth process, hopping from one office to another to get an import licence.

For instance, to apply for a licence to import a specific product is done at the beginning of the month by making an application on the 13th floor of Mukwati Building, after which a follow-up will be done on the 14th floor.

From the 14th floor, the application makes its way back downto the 12th floor of the where it is carefully examined by government economists.

According to investigations, the economists’ duty is to assess the applications so as to allocate the quota of the imported product for that month, depending on the national requirements and industry’s capacity to produce that particular product.

Once approved, the applicant goes back to the 14th floor to fill forms, after which payment will be made in room 47 of the same floor.

Proof of payment is submitted to room 36 on the same floor, to enable the processing of the permit.

The uncoordinated process is complicated. As a result, importers spend at least two weeks frequenting the offices to get the “golden paper”.

After payment, a successful applicant requires at least two days to take delivery of the document.

As if that is not enough, one is required to apply for an import permit from the ministry of Agriculture when importing agro foods, a process that takes no less than two days.

“After getting an import licence, sometimes we are required to get an agricultural permit when importing goods like dairy products which will sometimes come out when the import licence issued by the ministry of Commerce is nearing expiration,” the newly formed Zimbabwe Consumer Goods Importers Trust (ZCGIT) said.

ZCGIT is an association comprising Aeromat Trading, Bullred Distribution, The Cold Chain, Equip Solutions, Exclusive Brands , FMCG distribution, Tiger Sales and Distribution and Vaitive Trading — major consumer goods suppliers to key retailers and wholesalers in the country.

Ret tape has been identified as an obstacle to new investment. The process of acquiring import licences is marred with irregularities and needless bureaucracy.

The application process is replete with loopholes which create a breeding ground for corruption and underhand dealings.

The entire experience can be frustrating. An elegantly dressed woman has been at the offices several times.

“My permit expired,” she says. “It was valid for a month and I have not even received the goods I ordered.”

After approaching the offices, she was told she has to start the process all over again.

Lack of proper planning by the ministry seems to be impeding the ease of doing business being chanted by the same government department. Import licences must last a minimum of three months to allow for all cumbersome processes like bank transfer delays, shipping of goods, and Bureau Veritas inspections.

The 2016 Zimbabwe National Competitiveness Report by the National Economic Consultative Forum (NECF) revealed the country’s Global Competiveness Index (GCI) slipped one notch from 124 to 125 in the period 2015/16. The country ranked 131 in 2013-2014 and 124 in 2014-2015.

“Of special note is the fact that the country has some institutional, regulatory and legislative bottlenecks, which are also impinging on national competitiveness. There is a general perception that the regulatory burden in the country is still very high and too costly for business operations. Investor protection is also deemed to be weak and this may be discouraging foreign direct investment into the country,” notes the report.

Economist John Robertson said government was not being honest about improving business competitiveness in the country.

“This contradicts the government plan on the ease of doing business. Government is not reducing the difficulties faced by businesspeople,” he said.

ZCGIT seeks to engage the ministry of Industry and Commerce over the effects of Statutory Instrument 64 gazetted in June this year.

Importers say many licences are being issued to briefcase businesspeople, who then sell them. Official importers, who represent various brands, are denied the licences.

ZCGIT said the import licences which originally cost US$30 are becoming a tradable commodity as they are issued to non-distributors who then sell them at a premium.

“This is the consequence of the government that wants total control over the business sector by giving licences to the politically aligned individuals,” said an importer.

In its July report, the Consumer Council of Zimbabwe said it had assumed that the slight increase in prices was due to the grocery import ban imposed by the government.

“The competition in the country has been reduced hence retailers tend to increase prices,” reads the report.

According to Robertson, the best way to make industry competitive is through making the land bankable as this would boost agro processing industries.

“After all, the import ban is not enough to bring the industry back on foot. In fact, government should get farmers back to work so that they supply agricultural products to factories. The problem is the land. We do not have market value such that farmers cannot borrow from banks. This was broken during the land reform and now land can no longer be used as collateral,” he said.

ZCGIT said the fact that most importers were not importing as much as they did in the past could have an impact on at least 10 000 jobs.

“Obviously we will be seeking audience with the ministry of Industry and Commerce to put across our point of views and concerns as an association. We will present our concerns about the control of imports and facts on the jobs at stake. Also on the revenue lost not only by importing companies but government itself through duties and taxies.

And on the fact that local goods have gone up significantly to the detriment of the consumers,” the association said.

Chinese companies are taking advantage of porous border posts to import blankets using wrong licences. These companies are bringing rolls of already manufactured blankets instead of importing woven fabric.

Through Statutory Instrument 19 of 2016, government in February prohibited the importation of blankets, second-hand clothes and shoes without import licences.

Importing woven fabric attracts 10% duty whereas a blanket licence entails 40% duty plus US$2,50 per kg.

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