Fiscal Policy Shift Brings Hope To Zimbabwe Textile Sector

Trade & Policy

Fiscal Policy Shift Brings Hope To Zimbabwe Textile Sector

Blanket imports to Zimbabwe has dropped by about 98% from US$ 500,000 to US$ 11,000 since removal of the commodity from the open general import licence in July this year. Announcing the move in his mid-year fiscal policy review, Zimbabwe’s Finance and Economic Development Minister Patrick Chinamasa mentioned that the textile industry was one of the low hanging fruits whose turnaround could be realised within a short period, given adequate support.

The minister, instead, proposed to introduce a manufacturers’ rebate duty on critical inputs imported by approved textile manufacturers covering spare parts, yarn and unbleached fabric, among others. Zimbabwe Textile Manufacturers Association (ZITMA) vice president, Freedom Dube, said the textile sector was grateful to the government for coming up with a proactive fiscal position.

Zimbabwe’s textile and leather industries have, since dollarisation, been under siege from the influx of imports, especially finished second-hand clothes, shoes and leather products that have forced some of them to close down. Thousands have lost jobs in the clothing and textile industry in the last decade due to the economic crisis. Companies such as Karina Textiles, David Whitehead Textiles Limited, Merlin, Travan Textiles and National Blankets, which were some of the largest players in the industry, are under judicial management as the economic situation continues to worsen.

The new measure forms part of extensive interventions the government is taking to grow the economy, with the economic growth rate revised down from 3.2% to 1.5% due to a poor agricultural season.