Local Content Enhancement Programmes: Case Study Of Seed And Food And Beverages Sectors In Zimbabwe

Abstract

Zimbabwe since the turn of the new millennium witnessed incessant trade deficits which has seen the country importing goods which can be produced locally. Current account imbalances have been singled out as one of the destabilising factor in the Zimbabwe economy. Government of Zimbabwe crafted a local content strategy as one of its policy measures in addressing trade imbalances. In view of this, this study evaluated existing local content enhancement programmes in the seed, food and beverages sector on job creation, import substitution and export development. The study used purposive sampling approach and observed that firms in the seed, food and beverages sectors used various schemes of local content enhancement programmes ranging from contract farming, extension services support, provision of ready market and training. These programmes were effective in reducing the import bill in the respective sectors while in some cases imports were eliminated. With respect to exports, whilst there were mixed results on the impact of local content programmes on export growth, there is evidence which shows that with time sectors can build internal capacities to eventually export. However, some sectors in the beverages sector are exporting an average of 75% of the total output. Local content programmes were observed to be positively related to job creation. In order to both expand gains noticed in these sectors and extend them to other sectors of the economy, Government of Zimbabwe should consider various tax incentives and ease of doing business reforms with a view to create an enabling environment for business to invest in local content enhancement programmes.