Industry and Commerce Minister Mike Bimha said the ESSAR-ZISCO deal is a done deal. It is no longer an issue of policy or something for consideration. “We are working flat out to support the implementation of this agreement.”
Bimha was responding to a question by Senator Damian Mumvuri who wanted an update on the deal and government policy on the local clothing manufacturing industry.
“As I speak, there are engineers who arrived last week and this week in order to start work on the refurbishment of the plant,” Bimha responded on Thursday.
“However, there will be other activities that will take place even before the refurbishment is complete. I would like to assure the hon. senator that we will probably see the finalisation of this transaction before the end of this year but work has already been started on the other activities.”
The Minister said he was working on ways to protect domestic industry through a law which will forbid the importation of cheap goods and impose high tariffs on the importation of goods that were manufactured locally.
He was also working on reducing duty for raw materials used in manufacturing so that locally produced products could compete on the market.
Here is the question and answer:
SENATOR MUMVURI: Thank you Madam President. My question is directed to the Minister of Industry and Commerce. We want to get an update of the ESSAR deal at ZISCO Steel. Secondly, what is the Government policy on local clothing manufacturers who are suffering because of imported inferior goods? They are not able to manufacture here; if they manufacture, they are very expensive. What is the ministry doing about this? Thank you.
THE MINISTER OF INDUSTRY AND COMMERCE (MR.BIMHA): Thank you Madam President. I would like to thank the hon. senator for the two questions.
The finalisation of the ESSAR – ZISCO deal is an issue that we are very much seized with. Madam President, you will also notice that in the ZIMASSET economic blue print, the operationalisation of the ESSAR – ZISCO deal is actually one of the deliverables for my ministry. Therefore, as a ministry, we are working flat out to support the implementation of this agreement.
As I have said before, it is no longer an issue of policy or an issue of consideration by Cabinet. Cabinet approved the deal, made resolutions and there is an Implementation Committee which is enforcing and ensuring that implementation takes place.
As I said again before, because of the enormity of this investment, there are a number of issues that they have to tackle; one of them being negotiations with foreign and local creditors. Negotiations do take time but I am pleased to say that the majority of the things that had to be done are now in place and we are just probably seized with one or two issues which we think will be solved without any problems.
As I speak, there are engineers who arrived last week and this week in order to start work on the refurbishment of the plant. However, there will be other activities that will take place even before the refurbishment is complete. I would like to assure the hon. senator that we will probably see the finalisation of this transaction before the end of this year but work has already been started on the other activities.
I would like to attend to the second question. The second question has been addressed to the issue of clothing and probably textiles. However, let me widen it by addressing the issue of cheap products coming into the country.
There are two issues here. We have imports coming into this country illegally, which means we have goods that come into this country as a result of smuggling, firstly because of the network that exists where we find some people whose employment is to smuggle goods into the country.
Our biggest problem is our porous borders where we have people coming in through different points and bringing goods into the country. At the same time, we also have our share of corruption at border posts where things that are not allowed to come in do come in and therefore avoid duty.
When we used to have our fair share of economic hardships, a number of people went into the business of bringing goods that were not available here. What we are doing as a ministry is that, we are reviewing the entire tariff structure, in other words, look at those goods that we produce.
If we produce item A and B, we are more inclined to apply a heavy duty on the importation of those goods that we can produce in such a way that we can protect our local industry.
At the same time, we are also saying, where our local industries are producing certain goods, we would want to reduce or eliminate duty on the raw materials that they require to produce those goods.
By using those two strategies, what it means is that our local producers will find their cost of production going down because we will have reduced duty on raw materials and also increase duty to a substitute product coming into this country.
We believe those strategies will assist the local producers, at the same time we will be introducing to Parliament soon, a piece of legislation which will then create a regulatory authority, which will inspect goods on the basis of standards. Therefore, those goods which do not meet the standards that would have been set will not be allowed into this country.
Again, we think that measure will protect our local industry and ensure that those goods that do come in are goods that should come in and meet our standards in terms of quality.
I thank you Madam President.
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