ZIMBABWE can save foreign currency through reinforcement of value chain for goods that can be produced locally to cut the import bill and trade deficit, Industry and Commerce Minister Mangaliso Ndlovu has said. Potatoes, fertilisers, dairy products, pharmaceuticals, packaging material, crude soya bean oil and wheat among others made up the bulk of imported products.
Indications show that in the dairy sector for every one litre of milk imported into the country it cost US$0,85 cents in foreign currency and if the same litre is manufactured locally, only US$0,25 cents will be required for raw material imports, thus saving US$0,60 cents per litre in foreign currency.
In the packaging sector the cost of importing a finished mealie meal bag is US$0,20c and if the same product is produced locally US$0,12c would be required for raw material importation, thus saving US$0,08c per bag in foreign currency.
Speaking at the Value Chain Development Workshop in the capital, Minister Ndlovu highlighted that restoration of the local value chain was the panacea to the current trade deficit and foreign currency woes bedevilling the nation, indicating that his ministry has already identified key areas with high export potential.
"The country can save foreign currency by facilitating the manufacturing or growing of the major imported products through developing and strengthening value chain of the mainly imported products. Specific sector strategies including cotton to clothing, leather and pharmaceuticals are already being implemented. Consequently, duties on pharmaceutical raw materials have been removed, whilst 23 medicinal products have been removed from the import licenses.
"Ministry of Industry and Commerce is working on a number of programs that seek promotion of value chain development in selected identified areas which have high employment and export potential as well as comparative and competitive advantages," said Minister Ndlovu.
In his presentation he gave the current instance where the country could serve up to $15 million from importation of ammonium nitrate raw materials if the commodity was procured locally.
"For example at the moment about US$35 million is required to import raw material for producing 100 000 metric tonnes of Ammonium Nitrate, this will result in foreign currency saving of US$15 million if the Ammonium nitrate is produced locally," said the Minister.
The Parliamentary Portfolio Committee on Industry and Commerce and several industrial bodies including CZI, ZimTrade attended the workshop.