An analyst has claimed that the country’s trade deficit which averages $3.2 billion yearly is likely to increase if the government does not implement an import substitution policy.
Victor Bhoroma, business, and economic analyst has claimed that subsidising the country’s imports will help the country save billions in foreign currency. It also creates resilience in the economy through local employment creation, sustainable and increased tax revenues, promotes the initiation and growth of local industries and reinvestment of profits in the local economy. Bhoroma argues:
By importing virtually everything from South Africa, China, Singapore, India and Zambia, Zimbabwe is killing its home industries and exporting jobs to its import partners. The country now has a low industrial base where the government is heavily taxing a few compliant producers so as to meet its tax budgets.
Bhoroma laments the demise of the local industry which has resulted in billions spent on goods that can and used to be produced locally. He further argued that reliance on imported goods and services makes it a herculean task for the government to regulate retail prices if it wanted to.
He further opined that the absence of a strong industrial base that can meet domestic demand and export surplus output exposes the Zimbabwean economy to global shocks caused by fluctuations in commodity prices.
Bhoroma urged the government to come up with initiatives that are aimed at reviving and enhancing the growth of local industries. For him, the government must seek to replace agricultural and industrial imports to encourage local production for local consumption.