Zimbabwe textile industry operating below capacity in first half of the year

Zimbabwe government is yet to gazette Statutory Instruments (Sis) discouraging cheap imports of textile products into the country due to which the local textile industry has been operating at below 30% of capacity in the first-half of the year, said Zimbabwe Textile Manufacturers’ Association (ZTMA) secretary-general Raymond Huni

The government is in the process of gazetting the SIs enforcing the rebates introduced by the Finance minister (Patrick Chinamasa). They hope that the SI would be gazetted in two weeks’ time and it’s only after that they will start realizing some changes.

Huni said that the textile sector knows that government has no money and this was the reason why it needed protection from cheap imports. Some companies such as National Blankets who applied for the Distressed Marginalised Areas Fund have not yet received it.

According to Huni, if the ban on second-hand clothes was implemented it would see the sector double its contribution to Gross Domestic Product to 10%.

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. This rebate covers spare parts, yarn and unbleached fabric, among others.

Furthermore, it was proposed to remove blankets from the Open General Import Licence for a period of 24 months.

Poly-knitted fabric is currently imported in semi-processed form, hence undergoes very limited local value addition before transformation into a blanket, which competes with locally manufactured blankets. To that effect, government will increase customs duty on poly knitted fabric from 10% to 40% plus $2,50 per kg.

Local textile industry is currently in distress with Bulawayo in particular which used to be a major textile centre having many companies either scaled down or closed.

Some of the companies that have closed include True Value, Label Fashion, Suntosha Leisure Wear, Luncaster, Harren Manufacturing, Ascot, Belmor Fashions, Cinderella and Rusglen Fashions.

Recently, textile and clothing manufacturers cried foul over the alleged abuse of the Sadc and Common Market for Southern Africa (Comesa) trading certificates by countries outside the region. The associations said that Sadc and Comesa certificates were now being abused by outside countries.

The $40 million Distressed Marginalised Areas Fund (Dimaf), which was created in 2010 to help companies retool, largely failed to turn around the industry’s fortunes. The textile sector requires at least $20 million to revive the industry currently reeling under the influx of cheap imports and low capitalization levels.