On 23 October 2018, Zimbabwe’s Cabinet lifted the import restrictions imposed through the infamous Statutory Instrument 64 (SI64). SI64 was later revised, with more products being added and renamed Statutory Instrument 122 (SI122).
The SI122 listed a variety of products which could no longer be imported into Zimbabwe without an import license. The import license requirement was construed to be a ban on imports of the targeted products. Some products required both an import license and an import permit (especially agricultural related products) prior to being imported into Zimbabwe. The move was met with resistance from Zimbabweans and Zimbabwe’s trading partners, particularly South Africa, which is the largest exporter to Zimbabwe. The intention of SI122 was to protect Zimbabwean manufacturers of the targeted products from import competition.
Recent developments in Zimbabwe appear to have forced the government to temporarily lift SI122. In the last few weeks Zimbabwe has been experiencing a shortage of basic food products on the retail shelves accompanied by skyrocketing prices. Some retailers are demanding to be paid in US dollars rather than in Bond notes (Zimbabwe’s surrogate currency which is supposed to be pegged one-on-one with the US dollar). Monetary policy changes announced a few weeks ago, have seen the market valuing the US dollar at a higher rate than the Bond note. This has fuelled the foreign exchange black market as US dollars are in significant demand and being sold at a higher premium than normal. Compounding the situation is panic buying and hoarding by consumers. These developments have prompted the Zimbabwean government to urgently relax measures imposed on imports of certain products, through SI122. The aim is to allow an inflow of imported products into Zimbabwe to alleviate the current shortages.
These products impacted include, baked beans, body creams, bottled water, cement, cereals, cheese, coffee creams, cooking oil, crude soya bean oil, fertiliser, finished steel roofing sheets, wheat flour and ice cream, jams, juice blends, margarine, mayonnaise, packaging materials, peanut butter, pizza base, potato crisps, salad creams, shoe polish, soap, sugar, synthetic hair products, wheel barrows, agrochemicals and stock feeds among others.
The current shortages of basic food products and the high prices present an opportunity for South African manufacturers to take advantage by increasing exports into Zimbabwe. It is unclear for how long SI122 will remain lifted, however, this will likely be temporary.