Economists call for strengthening of import substitution mechanisms

By Davison Vandira

ECONOMISTS have amplified the urgent need to strengthen import substitution mechanisms to decisively offset the trade deficit which threatens to reverse the country’s favourable trade position.

The trend analysis of Zimbabwe’s external trade position summary as released by Zimbabwe National Statistics Agency has revealed that the country is losing its positive trade position attained in last two years.

The call by economists to domesticate industrial value chains, especially agro-based ones, are coming in the wake of the economy’s vulnerability to foreign shocks that has also resulted in imported inflation.

It is economists’ firm belief that Zimbabwe as an agro-based economy will reap huge economic benefits by localising its value chains as it will stimulate many downstream and upstream economic activities.

Kudakwashe Mugova, an economic analyst said, “We have been preaching the gospel of import substitution over the past years and the time to act is now, such that we reduce the economy’s vulnerability to external shocks that we avoid and minimise the burden we carry from these exogenous factors.”

“As a country, we made significant progress on import substitution when global supply chains were affected by COVID-19 and we now need to solidify these gains through implementing a robust local content policy where almost everything should be of Zimbabwean origin from raw materials, packaging up to the final product,” development economist Titus Mukove noted.

Economists are convinced that it is now prudent for the country to enact laws that maximise utilisation of domestic resources in industrial value chains to strengthen import substitution mechanisms.