Smuggling Epidemic: Local Businesses Feel the Pinc...

Smuggling Epidemic: Local Businesses Feel the Pinch

Nyashadzashe Ndoro- Chief Reporter

The rise in smuggling is significantly impacting local businesses, with CAFCA, a leading manufacturer and supplier of electrical cables, citing a challenging trading environment in its latest update.

According to CAFCA, the first quarter ending December 31, 2024, saw a surge in smuggled products, disrupting value chains and forcing retailers and manufacturers to adapt quickly.

"The market experienced an increase in smuggled products, which disrupted value chains and forced retailers and manufacturers to adapt rapidly," the company stated in its trading update.

Despite a 23% growth in volumes, largely driven by a 74% rise in aluminium sales, retail and distribution volumes fell 25% due to the growing informal market. Additionally, exports dropped 39% compared to the previous year, primarily due to foreign currency shortages in key markets like Malawi, Mozambique, and East Africa.

The increase in smuggling has been linked to Zimbabwe’s shift toward United States dollar transactions and the limited circulation of Zimbabwe Gold.

Government's Response to the Smuggling Crisis

Industry and Commerce Minister Mangaliso Ndlovu has called for urgent and innovative strategies to curb the influx of counterfeit goods, warning that smuggling is damaging Zimbabwe’s economy.

"We must think creatively and find effective ways to stop the smuggling of counterfeit goods," Ndlovu said.

He raised concerns over fake products flooding the market, either produced in unregulated backyard industries or smuggled from neighbouring countries. These counterfeit goods not only hurt local manufacturers but also mislead consumers, who often prioritize low prices without realizing the long-term consequences.

Additionally, illegal traders evade taxes, depriving the government of crucial revenue. To tackle this, Ndlovu pledged to push for stronger enforcement, policy reforms, and stricter measures to protect legitimate businesses and consumers.