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Duty waiver makes food cheaper
IRIN News
August 21, 2008

http://www.irinnews.org/report.aspx?ReportID=79926

Zimbabweans who have become dependant on cross-border forays to source necessities heaved a collective sigh of relief when the government decided to suspend import duty on essential food and non-food items.

The government has waived duty on cooking oil, margarine, rice, flour, washing powder (detergent), salt, laundry and bath soap, toothpaste and skin beauty products until the end of 2008.

The Southern African Development Community (SADC) launched its free trade area on 17 August, in which 85 percent of goods produced and sold within the region will be exempt from customs duties.

Zimbabwe's runaway inflation, estimated at more than 11 million percent by the government and at more than 15 million percent by independent economists, has weakened the currency and created shortages of food and other non-food items, power and fuel.

As soon as Beauty Munhangu, 40, an informal trader in Dzivaresekwa, a suburb in Harare, the capital, heard that import duty had been lifted, she travelled to the South African border town of Musina to buy new stock.

"I did not encounter many hassles on my way back from South Africa, only that some officials initially asked for an import licence, saying the volume of goods I was carrying indicated that I was importing them for commercial purposes, but they finally let me go - incredibly, without me paying anything," she told IRIN.

Innocent Makwiramiti, a Harare-based economist and past chief executive officer of the Zimbabwe National Chamber of Commerce (ZNCC), told IRIN that the suspension of duty on selected basic commodities would "naturally come to the rescue of consumers, who now can use their money to buy more".

"There could be a marked improvement in established shops as well, but buying from these might be the privilege of a few, since their prices are prohibitive," he said.

Buying from informal traders is more affordable, and Munhangu is not short of customers. She has several tuck shops in Dzivaresekwa, where soap, rice and cooking oil are cheaper than conventional shops, which charge as much as three times the original price.

"I hope it [suspension of import duty] will be extended when it expires in December," she said. "The government knows too well that informal traders like myself are providing relief, considering the widespread shortages of basic commodities, compounded by the scaling down of operations by well established shops and wholesalers. We require a lot of support through policies that ensure that our businesses, though not formalised, are boosted."

Buying committees

Enterprising Zimbabweans like Edna Samson, 28, a housewife in Dzivaresekwa, are taking advantage of the temporarily tax-free imports by setting up "buying committees", in which members pool funds to buy larger quantities to ensure there is enough to go around.

"We are making the best of the suspension. In order to buy big volumes of goods for use in our households, we have teamed up to mobilise enough money ... another member and I will be crossing the border to buy the goods," Samson told IRIN.

They have raised some of the money from the sale of vegetables procured from farms outside Harare, and have also set up a roster to ensure that even after the Christmas festive season they will not have to go without.

Samson hopes the government will also lift the duty on non-essential items such as clothing and other household goods. "While we might be able to stock our houses with basic commodities, the problem is that, now and then, we need to buy clothes for the children and ourselves, but the big shops that sell them are charging unaffordable prices."

Economist Makwiramiti said the government could not afford to maintain the suspension of import duty for long because it "desperately needs to boost its own coffers through taxation of imported products".

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