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Government suspends duty on imported basic goods
The Herald (Zimbabwe)
May 14, 2008

Government has, with effect from Monday this week, suspended duty on imported basic goods for the next 90 days in a move tailored to augment local supplies.

The Minister of Information and Publicity, Cde Sikhanyiso Ndlovu, made the announcement at a Press conference in Harare yesterday.

Basic goods that would be imported duty free for personal use include cooking oil, rice, margarine, flour, salt, bath soap, laundry soap, washing powder, toothpaste and petroleum jelly.

Cde Ndlovu blamed the low-level capacity utilization by Zimbabwean firms on acute shortages of foreign currency and the illegal sanctions for the disappearance of basic goods on the local market.

He said the recent liberalization of the foreign exchange market by the Government through the Reserve Bank of Zimbabwe was expected to improve foreign currency inflows to the productive sectors of the economy, enhancing capacity utilization by the domestic industry.

"In the interim period, it is necessary to ensure constant supply of imported basic goods that have been augmenting local supplies. The high level of duty, incidental to the current inter-bank rate used in the valuation for duty purposes depresses imported volumes of basic commodities," Cde Ndlovu said.

"In view of the above, Government is therefore suspending duty on basic commodities on the appended list for a period of 90 days with effect from 12 May."

He warned foreign suppliers not to abuse the temporary stop-gap measure by dumping goods into the country.

"Our people are cautioned that they must buy quality basic commodities. The responsibility rests on importers," he said.

Cde Ndlovu added that the Standards Association of Zimbabwe might be called to assess the quality of imported goods if the need arises adding that the move was "by no means a substitute to local production".

He also pointed out that the suspension was meant for importers to buy basic goods for personal use only.

Following the deregulation of the foreign exchange market, the Zimbabwe Revenue Authority was now using the interbank rate of between ZW$215 million to ZW$220 million per US$1.

Previously, Zimra was using the official exchange rate of US$1 to ZW$30 000.

The suspension of import duty on basic goods comes as the Grain Millers' Association of Zimbabwe is expected to unveil the first phase of its consolidated distribution programme aimed at minimizing leaks of products to the black market along the supply chain.

Under the initiative, millers that include National Foods, Blue Ribbon, Golden Millers, Gwai Miller and Discovery Millers agreed to consolidate their output before dispatching it to the market.

The first phase, which begins in Harare today before spreading to other provinces in the next few weeks, depending on grain availability, will see a total of 1 570 tonnes of flour being sold.

The sale will begin at 10 o'clock this morning at seven OK Zimbabwe supermarket branches in the central business district, four TM supermarkets, two Gutsai supermarkets and two Spar supermarkets.

TM Kenneth Kaunda will be dedicated to serving members of the security forces.

In an interview, the association's president, Mr Tafadzwa Musarara, hoped the move would go some way in reducing cases where black market operators grab the bulk of flour or maize-meal at the expense of consumers.

Mr Musarara also noted that the programme would enable millers to account for the grain they received from the Grain Marketing Board.

"The programme is aimed at reducing leaks of our products to the black market," he said.

"We plan to roll out the programme to other provinces depending on the availability of the grain and we will be targeting towns and cities."

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