Ban of imported edible oils to benefit local industry


THE suspension of issuance of licences for importation of edible oil by the Government will allow Zambia’s edible oil industry to grow and benefit the locals, says Edible Oil Refinery Association consultant Aubrey Chibumba.

He said the association was disappointed with Zambia Revenue Authority (ZRA) for defying Government’s directives to effect the ban on importation of edible oil.

Mr Chibumba said ZRA was not acting in the interest of the country and that it had no interest in the diversification of the economy, job creation and value addition of the largest employer, which is the agriculture sector.

He said the fact that edible oil attracted no VAT and had export incentives attached to it meant that it could land in Zambia below import parity price, a situation he said was making it difficult for the association to compete on the market.

Mr Chibumba said over $150million had been invested by his association in the edible oil industry with a   production capacity of 20,000 metric tonnes per month of refined vegetable oil, and over twice the domestic consumption of about 10,000 metric tonnes per month.

He said Zambia had been flooded with imported oil, saying the rampant smuggling of oil had reached unprecedented levels on the Zambia market.

“The association would like to commend the step taken by the Government to ban the importation of edible oil, the response to the current unfair practices in the edible oil sector and putting in place both a temporary ban on packed edible oil and a task force to investigate these unfair practices and to put forward recommendations that will allow the Zambian edible oil industry to grow is recommendable,” he said.

Mr Chibumba has however called for regulatory measures to enforce the current tax rules on imports, saying round tripping of transit edible oil destined for neighbouring countries’ and strategic dumping by manufacturers in SADC/COMESA, made the importers enjoy domestic tax and duty advantages that were not available to Zambia.

Mr Chibumba said the ZRA who were collecting the country’s revenues should ensure they supported the Government, especially on issues that were aimed at improving the country’s economy.

He said currently Zambia produced about 300,000- 500,000 metric tonnes of oil seed per year and that would mean that the installed refinery capacity had the potential to increase oil seed production by 300percent.

Mr Chibumba said the current market situation that the association was faced with was dire and was putting 4,000 jobs at risk due to unfair imports of on average 6,000 metric tonnes per month, and therefore making it difficult for the local products to compete with imported products.

Government last week suspended the issuance of licences for importation on edible oil.

Agriculture Minister Given Lubinda said the decision was made to allow experts from the ministries of Finance, Commerce and the Zambia Revenue Authority (ZRA) to study the impact the importation of vegetable oil has on the Zambian market.

But ZRA authorities claimed they could not effect the ban because they have  not seen the Statutory Instrument toallowing them do so.

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