13/07/2015
Our drive is to enable local importers to compete at par with SA importers. Local companies are not able to meet the minimum ordering levels for a majority of Chinese manufacturers. Against this, they thus import through SA agents at ridiculously high prices. The high prices make Zimbabwe less competitive to SA thus Zimbabwe just becomes a provider of road network to SA clients from the north: Zambia, DRC, Malawi, Tanzania, Mozambique.
An example may give you an insight. A pair of jean trousers lands in SA at $1.50 if the buyer orders the minimum ordering quantity of 175,000 units. Because the jeans have no SADC certificate of origin, they attract a 100% duty, thus the product, include duty lands in the shops at $3. The product is sold at $5, a margin of 67%. Zim traders are then levied 100% because there product does not have a SADC certificate of origin, thus lands in the shops at $10. They then retail it $15, a margin of 50%.
Our approach is therefore to import the 175,000 jeans and land them in Zimbabwe at $3 including duty. We then would want them sold at the SA price of $5. In so doing, we then capture all the traders from the north thereby setting a demonstration effect to all other traders and manufacturers in the country to the effect that they can compete against the SA wholesalers and traders if we refocus.
