Smuggling of essential goods continues unabatedly, reaches horrifying levels

TENDAI BHEBE IN BULAWAYO

Despite spirited efforts by the authorities to stop the smuggling of essential commodities from neighbouring countries , particularly South Africa, it appears the level of illicit activity has reached horrifying heights and is persisting unabatedly.

A  survey  conducted by Business Times last month revealed  that there is a crafty network of smugglers  that conspires with bus companies that operate on the Bulawayo-South Africa route  and cross-border transporters, also known as omalayitsha.

This means government is losing billions of dollars in potential  tax revenue.

The investigation also showed that Bulawayo has been transformed into a city of mini-shops by vendors, where illegal traders openly sell smuggled goods from the neighboring country of South Africa.

 

The investigation also revealed that the products are mainly offered for sale along Five Avenue between Robert Mugabe, Jason Moyo, and Joshua Mqabuko Nkomo streets in the CBD.

McKenzie Dongo, the chairman of the Matabeleland Zimbabwe National Chamber of Commerce (ZNCC), stated that the  the viability of formal businesses  was threatened by the smuggling problem.

 

“The smuggling is posing a serious threat to the viability of formally registered businesses.Its a serious cancer.And I don’t think there is much that has happened to warrant any joy  for formal businesses.

 

“I think it’s an area that needs to be looked into and see how best we can protect the local  formal industries,”he said.

 

Kurai Matsheza, president of the Confederation of Zimbabwe Industries, claimed that smuggling primarily affects retailers, so production output from industry has not decreased.

 

 

“The issue directly affects retailers and wholesalers. Manufacturers we do eventual suffer, yes, but for better detail it’s better to (get) information from retailers or wholesalers associations, said Matsheza.

 

However , the Zimbabwe Revenue Authority (ZIMRA) pointed out that the duty-free allowance is set at US$200 for goods meant for personal use, such as alcoholic beverages, where individuals are not permitted to pass with more than five litres, of which no more than two litres may be spirits.

 

The goods are not for resale or of a commercial nature. However,  the value of goods being brought in the country by informal traders significantly higher than the  US$200 mark.

 

As inflation ravaged the local currency, the government scrapped the duty on 10 products in May of this year.

 

These include rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, tea (whether or not flavoured), petroleum jelly, toothpaste, bath soap, laundry bar, and washing powder

 

The government’s decision was largely the result of the macroeconomic instability’s resurgence, with domestic inflation being primarily driven by a skewed preference for the US dollar as a reserve currency.

 

 

The government claimed that the decision to eliminate the duties on the chosen commodities was made to stop what it claimed were unjustified price increases for goods and services at the time.

 

The majority of businesses were setting their prices based on black market rates at a time when the local currency was rapidly depreciating against the US dollar.

 

 

The Minister of Industry and Commerce, Sithembiso Nyoni, said the retail and wholesale sector is this year projected to grow to US$5.2bn from the current US$4.1bn on the back of increased branch networks and increased shop density.

 

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