Zimbabwe MP says you cannot compete when you pay an employee $250 a month and China pays $36

For example, the cost of doing business today in Zimbabwe concerns the Ministry of Finance.  We are amongst the highest tax people in the world.  We have just seen the Ministry of Finance double the fines on the roads.  We have just seen the Ministry of Finance imposing a 5 percent tax on cellphone usage.  We pay I do not know how many taxes here and I think every Zimbabwean must pay at least half or more, 60 percent of their income in taxes.  In a high tax environment like that for example in Botswana or Mauritius, the maximum tax rate for a company is 15 percent and here it is 35. When we have these high cost taxation framework, it is very difficult for formal sector businesses to make money.

I know for example, at the moment, we have three platinum producers.  Two of them have special agreements with Government involving the payment of certain tax.  They only paid two percent.  The third producer Mimosa in the south pays 10 percent on their gross revenue.  I am pleased that the Minister of Finance and Economic Development has woken up to this and is taking steps to reduce it.  That is the kind of nonsense which in fact we have to avoid.

The Ministry of Transport, if you look at our transport costs, it is a fact Madam Chair that the cost of exporting from Zambia are a third less than exporting from Zimbabwe, why?  It is simply because our railway is not working.  It cost 12 cents a t/km to run a road truck and it cost 5 cents to run a railway line and it cost one and a half cents to run a pipeline.  You cannot, as a landlocked country, survive if your railways are not functioning.

Thirty years ago, our railways were handling twenty million tonnes of cargo a year, today they are handling two million tonnes and the railways are losing $45 million a year.  The railway used to employ thirty thousand people, today they employ six thousand.  That is not a problem which we need other people to fix, it is our problems and it is the Minister of Transport’s problem, not the Minister of Energy.  Unless we get on top of that, for example, when I was in the private sector, as a businessman, I led a group called the Beira Corridor Group.  Why did the business community in Zimbabwe invest in the Beira Corridor?  It is because we saved a thousand dollars on containers on exports to Beira as compared to Durban.  You cannot throw away a thousand dollars per container and you cannot compete internationally.  It cost $1 200 for China to send a 20 foot container to Europe, it cost us $3 800.

You are not even beginning to be performers in exporting unless you bring those cost under control.  That has nothing to do with the Ministry of Industry, that is for the Ministry of Transport.  It is also for the Ministry of Foreign Affairs because we have a deal with Mozambique and South Africa.  When I was the General Manager at the CSC, we had to ship our beef via Cape Town.  Do you know what that means – from Chinhoyi to Cape Town, it is thousands of kilometres by road because we could not handle it any other way.  You cannot be competitive if those are the kind of issues.

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