The Sunday News
A FEW weeks ago, the national statistical agency, Zimstat released figures of how the country performed in terms of imports and exports last year.
Zimbabwe exported goods worth $2,83 billion while it imported goods worth $5,21 billion leading to a trade deficit of $2,39 billion.
What is scary from these figures is the amount of money Zimbabweans are siphoning out of the economy. Imports of $5 billion basically means that such an amount found its way out of the economy and as a country we need to be jolted by such alarming figures.
In December last year, Finance Minister Patrick Chinamasa presented a $4,1 billion budget and from previous experience it is obvious that the country might even be able to raise such income the whole year. In real terms, we miss the budget because the Government simply fails to collect enough to meet the projected expenditure.
But at the same time as a nation we are mopping out almost $5 billion locally and taking it outside the country. Put it simply we are like a household where the father is struggling to raise $100 to meet the monthly needs of the family while at the same time the children are using $200 per month to buy jiggies. This is an unhealthy situation and does not at all reflect the problems which the ordinary person is going through.
Every country in the world imports to acquire those goods that they do not produce. They also import to add to the goods they produce in times of shortages. In this case, we have become so comfortable with buying goods from other countries to the extent that we have forgotten the simple economic dictates that says that local consumption is the first port of call when we want to improve the economy.
The temptation might be to rush to advocate that we need to improve exports. Yes, that is very valid but before we even think of increasing the exports maybe we need to fortify the local market and protect the $5 billion that is getting out of the country every 12 months. Imagine if even half of that money ($2,5 billion), was retained in the local economy. Sometimes we tend to look elsewhere for solutions to our problems when the solutions are at our fingertips. Use what we have and circulate this money and surely exports will come as a bonus and not as the main economic driver.
An economy cannot bank its growth on producing for outsiders when there is evidence that its own residents have money amounting to $5 billion which they take outside the country to buy even trinkets such as toothpicks. There is somewhere we are getting it wrong. Of course, the excuse by the people is always that it is cheaper to import than to buy locally produced goods. This is very valid especially for the ordinary person who is already suffering from economic pressures. The manufacturers also clamour that they cannot compete with imports due to high production costs.
Is this true? I do not know but that is what industrialists always say. However, you can also not discount the vulture tendency among some of the local manufacturers. If producing locally is that expensive, how do they justify some of the mark-ups they put on the locally produced goods? Some local businesses are also driven by greed. In a dollarised economy why would you put a mark-up of more than 10 percent? But this is exactly what some of our businesses are doing and they want to hide behind production costs.
The correct term is pricing themselves out of business. What has become worrying is that some of these businesses always rush to push Government to put some projectionist laws but they turn back and punish local consumers. In a dollarised economy, we cannot run away from the fact that the best way of wadding off all those foreign companies which are obviously eyeing our hard currency is to match them pound for pound. This defeatist attitude where we continue to cry that we can not match them also shows lack of innovation.
Are we that dull, considering our literacy levels and even the increasing number of tertiary institutions in the country, that our companies are failing to innovate and come up with the right technology and machinery to also produce relatively cheap products? We cannot continue complaining, especially considering some of the products we are importing.
Yes, there are some sophisticated goods we cannot produce overnight but surely the list of goods that are being imported sometimes do not make sense. How do we justify importing things like maheu, toothpicks, sweets and the like? Surely is it very expensive to produce toothpicks in this country that we would rather import them from as far as China?
We are not a desert and trees in just one district in this country are enough to produce enough toothpicks for the whole country and even for export. Let us not hide behind the rhetoric of production costs. What production costs come out of manufacturing simple things like toothpicks? Even armed with sharp knifes a group of youths can embark on the business.
There are many other goods we import which are not justifiable.
Sometimes you even see coloured maputi which would have been imported. There are a lot of imported spirits in some of the shops and you wonder if we can not just ferment some of the abundant sugar we have to make these cheap and affordable spirits.
This is exactly what other countries are doing and we queue at the borders or even use illegal entry points to bring their goods into the country. We can never grow an economy like that. We are more than 13 million and this is a good market enough to attract any serious businessperson and that is why this same market is able to mobilise $5 billion which it takes out of the country in just a year.
Government also needs to do its part. Why are we still importing such huge amounts of goods more than seven years since we officially dollarised? We need to promote local expenditure and to some extent promote exports. Yes, of course, exports bring the foreign currency but what is the use in trying to bring the foreign currency which will be out of the country the next day?
The first port of call is to protect that money before we think of raising more. Once the money is protected by encouraging local expenditure then exports will come in to improve and add to what we already have. That way we can never go wrong.
