New Import Duty Could Lead to Food Shortages in Zimbabwe

Over the past decade the country's political and economic crises have almost destroyed local industry and dramatically reduced the amount of goods produced locally. This has forced people to rely heavily on imported goods from neighbouring countries, such as Botswana and South Africa.

But last month Finance Minister Tendai Biti announced in his mid-term budget statement that the government would restore import duty to protect local industry from cheap imports. The state-owned media also reported that the imports have been re-introduced because of an 'improved supply of basic goods.'

For basic commodities such as maize meal and cooking oil, the proposed import duty will take effect from this month, while for other food stuffs such as potato chips, baked beans and mixed fruit jam, the rates will start applying from the beginning of September. The proposed duty will range between 10 percent and 25 percent. Duty on salt, rice and flour will remain suspended until end of this year.

This month the Zimbabwe Revenue Authority (Zimra) also introduced a 40% import duty on electronic goods such as fridges and stoves, as well as other commodities like blankets and footwear. Zimra says people are still allowed to bring in US$300 worth of duty free goods per month, but not these listed goods.

On Monday economic analyst Masimba Kuchera said: "I don't think the economy is ready as the import duties would want us to believe."

Kuchera said certain sectors did not have the capacity to produce sufficiently. He said many of them lacked the necessary capital or investment to do so. The Confederation of Zimbabwe Industries has also said that industry is failing to operate fully because of issues such as constant power cuts from the Zimbabwe Electricity Supply Authority.

"I'm looking at the sheer number of cooking oil brands from South Africa in Zimbabwean shops, I'm not sure if Olivine Industries are now able to produce to meet that demand," Kuchera explained.

He added that many sections of the country's industry were operating between 20-40% of their capacity, and this is a sign that industry will not be able to meet demand. He also said that increasing the import duty will force prices of imports to shoot up. "Some of the things like blankets and shoes we may not see the effect as much as cooking oil, which are more or less basic commodities, so people will feel the pinch more when they look at basic commodities," he said.

In addition to affecting ordinary people, cross-border traders are expected to be heavily hit. On Monday Augustine Tawanda, Secretary General of the Zimbabwe Cross-Border Traders' Association, said: "It's going to affect the traders. They are going to lose in terms of business because the products are going to be fairly expensive, and generally out of reach."

"If the prices go up the demand goes down, so we are going to see a significant reduction in imported food stuff getting into the country," Tawanda said.