Car import ban: ‘Not well-thought out policy’

• Outcry over ban of second-hand cars
• ‘Cruel ban by pampered Govt employees’
• ‘Misplaced priorities’ by Govt

Analysts have described the planned ban on the importation of second-hand cars contained in Finance and Economic Development Minister Mthuli Ncube’s ZW421,6 billion budget proposal delivered in Harare Thursday as a “not well-thought out policy”
Prof Ncube announced that his ministry proposed to ban second hand vehicles which were 10 years older from the date of manufacture. However, most people that own cars in Zimbabwe imported the pre-owned vehicles from Japan and other far-flung countries.
“Mr Speaker Sir, about US$1.3 billion was spent on imported buses, light commercial and passenger motor vehicles from 2015 to September 2020,” said Prof Ncube.
“This is despite the existence of capacity by the local motor industry to assemble the above-mentioned range of motor vehicles. Furthermore, due to lack of effective standards and regulation, road unworthy vehicles, which, in some instances fail to meet environmental and safety standards, find their way onto the market.
“In line with the NDS1, which underscores value addition, I propose to remove second-hand motor vehicles aged 10 years and above, from the date of manufacture at the time of importation, from the Open General Import Licence.”
Erica Maroro, a South Africa-based economic lecturer questioned the rational behind the ban, saying the policy had been tried before in Zimbabwe but failed because of a lack of both political will and availability of viable alternatives.
“In South Africa, for instance, they are very strict about used cars because they are protecting an already vibrant industry. Also, an employee that earns as little as R3000 here can get a car loan to buy something brand new,” said Maroro.
“However, what is Mthuli trying to protect? Without these used cars, long suffering Zimbabweans will not have an alternative. The cheapest brand new car will likely cost not less than US$20 000.
“The price will go up as well now that demand will likely grow. (President) Mnangagwa’s Government must first create an industry not behave like their police who arrest to investigate. Provide alternatives and then start banning things.”
Used car business has become an industry in Zimbabwe, benefiting a significant chunk of the population.
Car dealers operating along Simon Mazorodze near Radio Zimbabwe, told Nhau that it did not make sense for “pampered Government employees” to be making decisions about what is and what is not a good used car import.
“Have these guys ever driven used cars? They are putting buses that are 40 years old on the roads, buses that have killed people because they are unroadworthy but are trying to tell us that a 10-year-old car driven on some of the best roads in Japan and Europe should not be used here. Its madness,” said a popular car dealer known as Bla Jedza.
“This policy clearly lacks research and purpose. What did they consider, the age of the car or the mileage? If its really about the money spent over five years, which he mentioned (1.3 billion) – the argument does not hold water. The same money could have been spent on other things like hair for women, alcohol or even expensive clothes.”

Why old car imports should be banned
According to Prof Ncube, Zimbabweans spent over US$1.3 billion on vehicle imports since 2015, thus he argues the money could have been kept within the economy and used to develop the nation.
According to Finance Ministry statistics, Zimbabwe’s domestic motor industry has seen a reduction of units sold from 20 000 in 1997 to less than 3154 units sold in 2017.
This is a 12.54 percent annual drop in sales due to the competition from cheaper second-hand cars and the economic nosedive experienced between 2000 and 2017.
Further, the country spent over US$5 billion importing used cars between 2006 and 2016.
There is a history. In a bid to support the local motor industry, on 15 February 2018 Government launched the Zimbabwe Motor Industry Development Policy (ZMIDP) through the Minister of Industry, Commerce and Enterprise development, Mike Bimha.
This came on the backdrop of Government’s intention to phase out importation of second-hand vehicles to allow the local motor industry to grow.
By then it was calculated that the cost of these vehicles chewed an average of US$454.77 million annually.

In 2016, the cost of second-hand vehicles in terms of foreign currency was US$240 311 411, according to the Zimbabwe National Statistics Agency (Zimstat).
The cost of importing second-hand vehicles from 2006 to 2016 was $5 002 471 434 in foreign currency. In the ZMIDP report, the Central Vehicles Registry (CVR) reported that the first quarter of 2017 saw 14 470 second-hand vehicles imported into the country.
In total, statistics from CVR found that since 2007 to the end of the first quarter of 2017 at least 510 275 second-hand vehicles had been imported into the country. Thus, authorities, particularly Mnangagwa’s Second Republic, feel that vehicles older than 10 years should be banned in order to stimulate the local motor vehicle industry.
Considering the thrust of not just the budget but NDS1, which is premised on growth and sustaining economic stability – perhaps the ban should be praised instead of condemned.

It has been tried before
“The motor vehicle industry has never been easy to navigate in Zimbabwe – people have died because of it (ine makuva pasi),” said Silas Chirwa, who owns a car sale.
Zimbabwe has a history of used car bans stretching back to 1997 and a complete ban on any type of cars whether old or brand new going back as far as pre-independence.
Over the years, particularly over former president Robert Mugabe’s lengthy administration, several ministers lobbied for the ban of second-hand vehicles, premising their focus on vehicles that were five years old from the date of manufacture.
In 2010 Government banned the importation of vehicles older than five years but later backed down.
In June 2011, minister of Transport, Communication and Infrastructure Development Nicholas Goche said that government needed to consult widely with stakeholders in order to implement the measure but nothing has transpired.
In December last year Minister of Transport and Infrastructure Development Joel Biggie Matiza said Government was considering imposing tough regulations on the import of second- hand vehicles which come with serious defects turning the country into a dumping zone for impaired vehicles.
“There is an appetite to own cars which has seen a rise in importation of ex-Japanese cars. Time has come to legislate and monitor the number of years for each car before it is imported. There is really a need to look at the age of each car as most of them are grounded after two months because people can’t get spare parts,” Matiza said.
Perhaps his statement is also another reason that government intends to rely on when banning the importation of used cars.

Criticism: A non-existent industry
Besides that, the Zimbabwean motor vehicle industry is almost non-existent, the few locally assembled vehicles are beyond the reach of many hence most opt to import these cheap vehicles.
Motorists favour second hand vehicle imports because they are affordable with an average price range between $3 000 to $7 000 compared to over US$20 000 for brand new locally assembled cars.
“This is a textbook case of misplaced priorities. As always people have argued that Government should never ban anything without giving alternatives.
“The reasons given (that the country is wasting money) do not make sense. We would have expected, for example, that the budget discourages people from buying cheap imported cars then incentivise them to buy new ones manufactured locally.
“Or put money towards buying land and giving tax breaks, duty exemptions and loans to land developers. That is an alternative, not simply waking up to make life tougher for a people already reeling under unending austerity measures.”
Silas Chirwa, who owns a car sale said: “If the government is serious about saving foreign currency by stopping the importation of second-hand vehicles, then the authorities should put their money where their mouths are and stop importing expensive vehicles, which are driven by ministers and legislators.”

How are other African Countries are doing it?
More than 1.2 million used vehicles were imported into Africa in 2017, United Nations figures show.
Most were destined for Nigeria and Kenya, two of Africa’s largest economies. Both countries also have car-assembling plants.
In countries like South Africa, used vehicles are not even allowed on the country’s roads.
However, largely, there is an appetite for these cars on the continent, but a growing general argument against the importation of these vehicles is that they contribute to the pollution burden.
Africa has become “the burial ground of vehicles that run on fossil fuel as the West turns to electric and newer cleaner technologies,” said Philip Jakpor, an activist with the Nigerian branch of the group Friends of the Earth.
Many second-hand vehicles shipped to Africa from Japan are believed to have failed, or were about to fail, pollution tests there, according to the United Nations Environment Programme.
But in many parts of Africa such regulations are often poorly enforced, and rampant corruption ensures that used vehicles can slip by any controls.
In Zimbabwe, where the government has tried and failed to impose restrictions amid resistance from importers and others, there was no age limit for imported cars.
Used cars are not checked for emissions levels when they enter the country from ports in Tanzania, Namibia and South Africa, which notably allows the importation of used vehicles only for re-export to other countries.
Zimbabwe’s environment protection agency, EMA, lacks the resources to conduct effective spot checks for emissions, and over the years the government has appeared fickle in its attempts to regulate the trade in used vehicles.
Perhaps, instead of pursuing this policy government must start by implementing mechanisms that monitor emissions by enabling EMA.

Way forward
The vehicle manufacturing industry must gradually be resuscitated and investment policies revised so that other car manufacturers are attracted to come and establish plants in the country as it is done elsewhere.
Because a sudden ban on the import of cars above 10 years on Zimbabwean roads will see the country battling with the problem of really old cars above 20 years, which are already here.
Ever heard of Cuba? Cars that are over 40 years old still drive on their roads. Nhau/Indaba