HomeBusinessClothing manufacturers seek govt loan guarantee

Clothing manufacturers seek govt loan guarantee

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HARARE — Local clothing manufacturers want the government to guarantee a $5 million bank facility for companies in the sector to help its recovery, an official has said.

They are also pushing for a new law which compels clothing retailers to buy at least 50% of their merchandise from local manufacturers.

Zimbabwe Clothing Manufacturers Association chairman Jeremy Youmans told a parliamentary portfolio committee on industry and commerce on Tuesday that the association would negotiate for the five-year facility with local financial institutions, but needs the State to act as guarantor.

“It is the aim of ZCMA to grow industry back to its heyday and to a level of employment of 35 000 employees within five years. This means the creation of 29 000 jobs and a growth of nearly 600%,” Youmans said.

He said the producers have between 20-25% of the local market due to undercapitalisation of the sector and the proliferation of imports.

“At our targeted level of employment, we would be able to meet all demand. However, there will always be a market for imported goods and we do not intend to try and compete (with imports) on every item. Therefore, we project to utilize 75% of capacity to service the local market and the balance of 25% will be exported,” Youmans said.

He urged government to charge duty on all imported clothing being cleared under the Sadc certificate of origin or South Africa-Zimbabwe bilateral agreement certificate of origin as deposit pending verification of authenticity of origin.

“There is enormous abuse of Sadc Certificate of Origins to enable non-compliant goods to enter the country duty free. Hundreds of containers of clothing enter Zimbabwe each year, cleared under a Sadc Certificate, when the goods are seldom compliant. Zimra continues to accept Sadc Certificates of Origin even when the goods have labels saying “Made in China’, “Made in India,” “Made in South Africa from imported fabric,” Youmans said.

The association also urged the State Procurement Board to buy local clothing.

“Many of the tenders awarded via SPB are allocated to briefcase companies who either import the goods or act as middle man to a foreign manufacturer, leading SPB to pay higher costs than it needs to,” he said.

Also appearing before the same committee, the Zimbabwe Textiles Manufacturers Association said Zimbabwe should immediately enact a law which promotes value addition in the cotton industry.

“Zimbabwe has become an exporter of commodity raw materials to the detriment to the local industry. Cotton lint is exported and finished fabric and articles of clothing are imported.

“The value chain between raw materials and finished products is being done overseas. This mindset needs to change,” ZTMA secretarygeneral Raymond Huni said.

–The Source

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