PRODUCERS OF CEMENT NOW BIGGEST IMPORTERS OF CEMENT. THIS OF CONFLICT OF INTEREST.
While Zimbabwe is enjoying a construction boom, we have learnt that some of the biggest cement producers in Zimbabwe have become the biggest importers of cement.
So, instead of import substituting by producing cement locally in the local currency and asking the government to raise duties to protect local manufacturing; these companies are now importing cement from their foreign competitors and encouraging the government to not lift import duties.
And to think that Zimbabwe has one of the top 10 biggest reserves of high-grade coking coal which produces ash that goes into cement, and when Manhize comes online, it will produce a huge amount of ash that should be going into our cement. The question becomes, what happens to this high-grade ash then if our cement producers are killing their own factories by importing competitors' products?
This is sabotage and deindustrialization, as we export our jobs and dollars to Mozambique and Zambian cement manufacturers. What country under sanctions seeks opportunities to throw away scarce foreign currency to its competitors, like that?
However, what is more ironic is these companies don't want sanctions to end because their shareholders are getting rich from importing products that they are meant to be manufacturing, in the absence of direct competition, using the convenient excuse of sanctions.
Why then were these companies issued cement manufacturing licenses, if they can't innovate (systems, processes and products) to mitigate sanctions? Why don't we ever see these companies and their shareholders partnering with us in our court cases or lobbying to end sanctions?
The fact is, many business people in Zimbabwe don't want sanctions to go because they make them rich through arbitrage, fewer competitors and giving them a monopoly.
This is why even though the US government clearly informed Zim government officials [two years ago] that it has given instructions to OFAC and the US Treasury, to remove MMCZ and ZMDC from sanctions after those two companies wrote specifically worded letters to OFAC. High-ranking civil servants in certain departments, sat on those letters and have not sent them to OFAC for over two years. A clear case of treason by omission, to perpetuate sanctions.
Nevertheless, we need these civil servants and business people in manufacturing, to understand that we can't have a nation where a few live comfortably at the expense of the poor majority, by importing for arbitrage, in the process raising inflation, because then we are creating conditions for destabilization and #ArabSpring type chaos.
Our military should appreciate the risk of skyrocketing import inflation driven by greed based importing. And like they warned another oligarch that he would get dealt with for sabotaging consumer goods prices and manipulating the foreign currency black-market; they now need to look at these cement manufacturers-turned-importers who are now gambling with our economy by colluding with foreign competitors, to harvest the Zimbabwean economy.
It is axiomatic that no company with a manufacturing license in Zimbabwe, should be allowed to import [from their foreign competitors] what they are meant to be manufacturing locally, because this is a conflict of interest and anti-competitive behavior.
What they should focused on, is busting sanctions and innovating ways to import machines, technology, tools, software, inputs, formulas and skills to make them more productive and competitive under sanctions. NOT importing competitors’ products.
Tariffs are placed to protect local manufacturers in an economy BUT in Zimbabwe it's those local manufacturers that are being protected by those tariffs who are now importing and evading tariffs. This opens a means to externalize savings and forex. It’s animal farm, and it must end. #EndAnimalFarm
Written by Rutendo Matinyarare, Chairman of ZASM.