Impact Evaluation of Statutory Instrument 64 of 2016 on Consumer Prices in Zimbabwe
Statutory Instrument 64 of 2016 in Zimbabwe regulates the importation of various products to promote local production. The legislation does not ban imports but requires licensing for bulk importers. The consumer prices of certain goods increased post-implementation, influenced by factors beyond SI 64 such as fluctuating fuel prices and supermarket pricing strategies.
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Three months into SI 64 of 2016: An Impact Evaluation: Consumer Perspective Presentation by Rosemary Siyachitema Executive Director CONSUMER COUNCIL OF ZIMBABWE 12-13 October 2016
Let me just identify SI 64 and key issues on SI 64: The government has recently gazetted Statutory Instrument 64 of 2016, which temporarily regulates the importation of certain products that can be produced locally. Some of the products which were removed from the Open General Import License (OGIL) include bottled water, mayonnaise, salad cream, peanut butter, jams, yogurts, flavoured milks, dairy juice blends, ice creams, cultured milk, cheese, white petroleum jellies, body creams, plastic pipes and cooking oil. The legislation also controls importation of second hand tyres, urea and ammonium fertilizers, tile adhesives and tylon, shoe polish, synthetic hair products, building materials and furniture.
The Minister of Industry and Commerce, Hon. Mike Bimha had to clarify to the nation that Statutory Instrument 64 of 2016 (SI 64, 2016) was meant to regulate commercial imports and the legislation does not mean a ban on importation of listed products but imposes a licensing requirement for bulk importers. It also means that the removal of products from OGIL implies that a license will be required to import the listed products. This clarification came after the legislation was received with mixed feelings by demonstrations in the Beitbridge area which saw people burning down the Zimra Warehouse. many and it caused
SI 64 focuses on goods purchased for resale, people who bring truckloads of products into the country for resale. In a nutshell, the SI is not targeting goods for individual consumption. And that administrative aspect falls under ZIMRA s purview.
CCZ Family Basket Price survey 12 10 8 Apr-16 6 May-16 Jun-16 4 Jul-16 Aug-16 Sep-16 2 0
The graph above is a depiction of the family basket three months before and three months after SI 64 was put in place and it generally shows that there are some increase in basket prices of goods after SI 64 was in place. This is mostly seen in margarine, cooking oil, meat, laundry bar, and washing powder. The increase can be attributed to various cost pushers besides SI 64 which include fluctuating fuel prices, general increases that supermarkets put on their goods and uncompetitive price products in Zimbabwe .
Generally, over the last three or four years we have seen consumer behavior change especially in their spending patterns and CCZ has attributed this to: Not only the introduction of SI 64 Consumers pockets overstretched in also paying for other services like transport, school fees, rentals, electricity and water. NB: it is important that we don t only attribute changes in product prices only to SI 64 but remember that there are other cost pushers that are also culprits in our products shifting prices.
Consumers have resorted to buying smaller amounts ..re-emergency of tsaona . Consumers do more shopping around and thus incur more transport cost. Consumers now do not easily part with their money unless it is a necessary buy, further resulting in less cash circulating in the environment. There has been a product availability gap created by the institution of SI 64 whilst manufacturing productivity is ranging in the 30 35%....meaning that for a period after SI 64, some products disappeared on the shelves and consumers right to choice was limited and there was lack of competitive pricing because local products were priced higher .
But on another level, consumer complaints handled by CCZ were easier to resolve because most products bought by consumers were locally made and therefore local producers could be reached to resolve them. NB environment was negatively NB: : SI SI 64 environment and was that negatively and was negatively and therefore that it it was and some 64 was negatively received therefore all was to some of received by all expectations to impact of the all in of SI SI 64 environment for this by all in the the 64 expectations of impact the the reasons the environment reasons for this maybe maybe: :
1. Lack submission 2. Poor publicity quarters 3. Lack of the Lack submission of 2. Poor quarters. . 3. Lack the community consultation of SI SI 64 publicity and of of consultation 64. . and misinformation in in the the creation creation and and 1. misinformation from from various various of further community right further education right down education and down to and to to the to different the consumers different levels consumers. . levels of of If If the be the above be no above have no reason have been now for been better for damage better handled, damage control handled, there control . . there would would reason now
Based on what has been said especially by the originating Ministry of SI 64 (Ministry of Industry and Commerce), consumers have great expectations and these expectations can only be met if there is real effort to monitor the impact of SI 64. It has been said that SI 64 will: 1. Rejuvenation of manufacturing resulting in increased productivity in both range, standard and quality on our shelves. Currently we talk of productivity levels of 30 35% and consumers want to see these figures increase by way of physically seeing more products.
2. Once productivity increases, unit cost must fall. 3.Once manufacturing and productivity is buoyant employment consumers have money in their pockets to spend and therefore: Consumers cost of living and quality of life should improve and Zimbabwean exports should increase and be more competitive and Zimbabwe earns more foreign currency to improve social and economic environment. figures must rise thus more
Once there is more money circulating in the environment, less queues at the bank. NB NB: : Consumers coming the Any variations that happens to SI 64, with regard to whatever re-negotiations happening with our trading partners in the region as we have made to understand that there are talks going on. Consumers need coming from the issues need to periodic monitoring issues mentioned to be monitoring and above: : be updated updated on and evaluation on results evaluation of results from periodic mentioned above of
Thank you Thank you Tatenda Tatenda Siyabonga Siyabonga
