The Textile industry in Zimbabwe is set to increase capacity utilization to 45% this year, following the government’s move to gazette statutory instruments to curb cheap textile imports into the country, an official has said.
This move will see a 15% increase in the industry that was operating below 30% capacity in 2015 due to an influx of cheap import.
In a bid to recover the local industry, the government has introduced some actions to safeguard the sector. Speaking to NewsDay, Zimbabwe Textile Manufacturers’ Association secretary-general, Raymond Huni said: “This year we are anticipating an improvement due to a number of measures introduced by the government to protect the industry. As [an] industry, if everything goes well we want to push industry capacity to 45%.”
In order to fully revive the textile sector, that is whirling under low capitalization levels, at least $20 million is needed. Unfortunately, the government is not in a position to fund this project at the moment.
A ban on second-hand clothes imports and a rebate on inputs to revive the industry
In July 2015, the Finance minister Patrick Chinamasa, in his Mid-Term Fiscal Policy review introduced the manufacturers’ rebate of duty on critical inputs imported by approved textile manufacturers. According to the review document, the rebate covers spare parts, yarn and unbleached fabric, among others.
To further resuscitate the industry, it was proposed that blankets should be removed from the Open General Import License for a period of 24 months.
This was seen as a strategy to revive local industry dealing with processing of blankets. The imported poly-knitted fabric in semi-processed form, undergoes very limited domestic value addition before transformation into a blanket, which is a threat to the locally manufactured blankets.
Thus, the government reviewed the customs duty on poly-knitted fabric from 10% to 40% plus $2,50 per kg.
Additionally, the government banned imports of the second-hand clothes. Mr Huni noted that if these measures are implemented, the sector would double its contribution to gross domestic product to 10%.