Outrage over govt profligacy
CAPTAINS of the country’s ailing industries turned the heat on government at a recent Buy Local conference, accusing it of fuelling an economic crisis by importing expensive top-of-the-range vehicles for big shots.
After the industrialists received gloomy statistics indicating that the cumulative current account deficit had stretched to US$18 billion since 2009, they demanded wide ranging reviews of government spending on luxuries, said to be worsening an already precarious financial position.
Imported expensive cars are given to a few members of government, while millions face starvation in Zimbabwe, where rains have failed and many are unemployed after 4 500 firms collapsed between 2011 and 2013.
The US$18 billion cumulative current account deficit, which shows that Zimbabwe has been dependent more on imported products than exports, is one and half times bigger that the country’s gross domestic product (GDP), which is estimated at about US$12 billion.
Confederation of Zimbabwe Industries (CZI) vice president, Sifelani Jabangwe, told the Buy Zimbabwe summit in Victoria Falls that importation of expensive cars for government had dealt a major blow to local car assemblers, and thousands of downstream industries.
“What if we made the decision that the only single cab truck the whole country would buy would be the BT50 assembled by Willovale (and that) this is the only truck that all government departments, parastatals and private companies would buy and utilise?” Jabangwe asked.
“Let’s assume this resulted in a demand level of 4 000 cars per month for Willowvale and Willow- vale develops strong linkages to the local manufacturing sector. This demand level of 4 000 cars would translate into monthly demand as follows: 20 000 tyres per month for Dunlop, 4 000 batteries for the battery manufacturers, 4 000 exhausts and silencers systems, 4 000 filters, 16 000 glass panes for PG glass, automotive paint from Astra and Dulux,” Jabangwe argued.
Industrialists were furious that not only was the importation of expensive Mercedes Benz vehicles, valued at US$ 170 000 each and Prados or Range Rovers averaging US$110 000 each, draining millions from Treasury but were also undermining industrial recovery.
Government’s decision in 2013 to spend millions on imported Ford Rangers from Croco Motors, which was at variance with Cabinet directives requiring State institutions to buy from domestic manufacturers, such as Willowvale Mazda Motor Industries (WMMI) and the Mutare-based Quest Motors, sparked the furore.
Both firms are facing collapse due to a dwindling market.
At the charged summit, two Cabinet Ministers, two ZANU-PF legislators and a permanent secretary in the Ministry of Finance and Economic Development flew into the eye of a raging storm, where they faced a flurry of accusations, with some private sector executives questioning their patriotism.
In the first three months of this year alone, Zimbabwe registered a trade deficit of US$853 million, which is equivalent to 171 medium enterprises turning over US$5 million per annum each, according to Jabangwe.
Vice president Phelekezela Mphoko escaped the grilling after he failed to turn up to officially open the summit.
But legislator, Tapiwa Matangaidze, vowed that members of the august House were ready to drive the WMMI-assembled BT50, which he said had been ignored because Croco Motors had put forward affordable terms to government.
Switching to local products is a wish that may remain a pipe dream for Buy Zimbabwe chief executive officer, Munyaradzi Hwengwere and his team, judging by Industry and Commerce Minister, Mike Bimha’s comments.
“It is government policy that we have to buy local,” Bimha told the summit.
“It is in black and white.
“We have to buy local. It is still government policy that we have to continue to enforce again and again. But the people who buy things are not policy-makers.
“Sometimes you only discover later that they have been importing from country X.
“But there are circumstances where you want to fulfil conditions of service and you have the private sector saying we can bail you out, structure an arrangement and buy from us,” Bimha told the conference.Newly-elected ZANU-PF legislator for Harare East, Terence Mukupe, was outraged by the flood of questions to ministers and described as “mischievous” a delegate who sought clarity from Bimha.
“It is mischievous for this gentleman to continue asking a question that has already been addressed,” Mukupe charged.
“The reason why Parliament is buying Ford Rangers is a financial issue. That is why government is not buying from WMMI. Croco Motors is placing a financial package with banks to finance.”
However, government controls WMMI through its wholly owned Industrial Development Corporation of Zimbabwe.
It is therefore difficult to understand why the Ministry of Finance and Economic Development failed to negotiate viable payment plans from its own outfit and preferred to drain millions from taxpayers on imports.