Plans to come up with local content fiscal incentives for companies that will comply with the requirements of this initiative presents an opportunity for the country to further narrow its $1.4 billion current account deficit to manageable levels.
Current efforts to recalibrate the country’s economy have given hope to the majority, and more so for the private sector which was burdened by challenges of an illiquid market and foreign currency shortages.
Pragmatic efforts by the government through Statutory Instrument (SI) 64 of 2016 as well as increased export revenue following strong tobacco harvests this year have helped to stabilise the current account deficit which narrowed from as high as $5 billion in the last four years to the current $1.4 billion.
Industry leaders believe this figure can be further reduced if the government puts in place an incentive scheme for companies that will comply with local content requirements, including but not limited to production and productivity-related tax incentives, indigenisation credits and public procurement preferences.
There were also proposals from Buy Zimbabwe to the Minister of Finance and Economic Development and the Reserve Bank of Zimbabwe (RBZ) Governo that non-compliance should attract structured disincentives.
The sooner this is implemented the better, but industry leaders want this issue addressed in the 2018 national budget expected to be presented this Thursday.