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Zim to compel 50% local procurement

Harare - The Zimbabwean government through the ministry of indigenisation will soon gazette a statutory instrument that will compel all companies operating in the country to procure 50% of their goods and services from businesses in which a controlling interest is held by indigenous Zimbabweans.

Minister of Youth Development, Indigenisation and Empowerment Saviour Kasukuwere told the Buy Zimbabwe Procurement Conference on Monday that his ministry would soon gazette a statutory instrument to give effect to the 50% local procurement clause as spelt out in the Indigenisation Act. 

The Indigenisation Act under chapter 3 (f) says all government departments, statutory bodies and local authorities and all companies shall procure at least 50% of their goods and services required to be procured in terms of the Procurement Act [Chapter 22:15] from businesses in which a controlling interest is held by indigenous Zimbabweans.

According to a report by the Financial Express, Kasukuwere told the conference that the country cannot continue sidelining its local business persons when more sophisticated economies like South Africa and Australia have mandatory local procurement quotas.

“By not procuring from our own local industries we are in fact channelling scarce financial resources towards creation of employment in other countries.”

Kasukuwere said it was disheartening to note that local companies such as Willowvale Mazda Motor Industries, Zimbabwe's largest car assembly plant, are on the verge of collapse while government - a shareholder in the same company - is buying vehicles from abroad. 

“The ‘foreign is better’ mindset in our institutions, retailers and regrettably some of our people has created a situation in which those of ours that have sought to become more competitive, better packaged and less pricey are also stigmatised.” 

Kasukuwere however ruled out protectionist measures, saying protectionism has its limits and can only work for a short period.

“What is key is to invest in becoming more competitive, more market savvy, more respectful of the local consumer and more insightful,” he said.

The country’s manufacturing sector has failed to recover since dollarisation, as it continues to be dogged by serious capital constraints which have limited capacity to retool. Capacity utilisation in Zimbabwe’s manufacturing sector has plunged about 44.2%.

The companies have also been affected by stiff competition from cheap imported products, forcing retailers to import approximately 60% of their merchandise.

 - Fin24
 
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