ZIMBABWE’S trade development and promotion organisation, ZimTrade, is working with eight companies in the private sector to set up bonded warehouses in the country and abroad as a way of improving access to raw materials and increasing domestic production.
A bonded warehouse is a building or a custom-controlled warehouse where goods are kept for processing before delivery.
Bonded goods are only kept for a defined period of time, during which the duties and taxes should be paid in full.
Responding to questions from delegates attending the Zimbabwe National Chamber of Commerce (ZNCC) conference held in Bulawayo recently, ZimTrade operations director Similo Nkala said they have signed memorandum of understanding (MOU) with eight companies who are willing to set up bonded warehouses in the country.
“At the present moment, we are exploring, together in partnership with the private sector in terms of coming up with a warehouse. We initially called it Zimcity. We are still exploring in partnership with the private sector,” Nkala said.
“There are about eight companies that we have signed MOUs with, who are in the fast-moving consumer goods industry who are really interested in this concept. The first one should be in Kitwe, Zambia. So it’s something that is there on the pipeline, it’s still work in progress. I am sure when the time comes; we will give you as much information as possible,” he said.
Nkala said there were other private sector players that were also exploring South Africa as a market to come up with a specific bonded warehouse where they can take their goods to.
According to the Zimbabwe Revenue Authority, some of the benefits of bonded warehouses are that goods can be stored without payment of duty, thus giving the importer an opportunity to manage cash flows.
Some goods may sell slowly due to fluctuating demand, hence duty can be paid according to demand. Constant supply of raw materials can be assured in the manufacturing industry by importing in bulk and payments being made according to production demands.
The operational competitiveness of local manufacturers has been negatively affected by lack of access to raw materials on time; hence setting up bonded warehouses could be handy.
Again, more raw materials are needed as the country is gearing up for the African Continental Free Trade Area.—Staff Writer.