THE decision by the Cabinet to allow cheaper cement imports is likely to trigger chaos among local producers who will suffer significant sales declines.
The directive was issued this week during the routine Cabinet briefing meetings after consideration of higher prices and critical shortages which the authorities described as “artificial”.
“Cabinet considered the report on the Cement Industry Market Supply and Demand situation as presented by the Minister of Industry and Commerce, Honourable Dr Sithembiso Nyoni.
“The nation is advised that following reports of artificial cement shortage in the market and the spiraling prices, the Cabinet has approved the importation of cement by individuals and companies with free funds,” a post-cabinet statement said.
The policy measure flies in the face of local cement manufacturers who for long have bemoaned the negative impact posed by cheaper imports on the local market.
During President Emmerson Mnangagwa’s tour of PPC Cement two years ago, the company’s management lamented the impact of cheaper cement imports on local productivity, prompting the government to ban all imports through Statutory Instrument 89 of 2021.
Even last year, Khaya Cement also shared similar sentiments after describing the cheap imported cement as a serious threat to the domestic industry which has enough capacity to meet national demand.
The company called for constructive engagement to end the influx.
But shortly after the ban on cement imports, the price for one bag skyrocketed from the usual US$9,00 per bag to as much as US$20,00 pushing the cost of construction to unsustainable margins.
Such market trends have in turn left the government with very limited options except to allow free importation which will have negative impacts on local producers.
The move will also trigger foreign currency outflows from the economy and impact on jobs as traders opt for foreign markets where producers often enjoy favorable trading conditions.
In 2021, Zimbabwe imported $41.4M in Cement, becoming the 83rd largest importer of Cement in the world.
In the same year, Cement was the 34th most imported product in Zimbabwe. Zimbabwe imports Cement primarily from: Zambia ($35.3M), South Africa ($6.17M), China ($7.22k), Botswana ($1.72k), and Japan ($1.56k).
The fastest-growing import markets in Cement for Zimbabwe between 2020 and 2021 were Zambia ($22.7M), South Africa ($5.24M), and China ($5.64k).