Local wheat flour producers have expressed fears of closure should government agree to phase out the 15% levy on imported flour.
The levy was enforced in 2003, just a year before the revised Southern Africa Customs Union (SACU) agreement was introduced.
The levy was intended to safeguard against unfair pricing from outside the country as some local millers had reported cases of threatening supplies into the country.
South African traders have since approached SACU calling for the removal of the levy that they view as a non-tariff barrier that restricts free movement of agricultural goods.
Some local traders also complained that the levy made imported flour more expensive.
Local millers, Bolux and Bokomo have however argued that they have the capacity to meet local demand for wheat flour and complained that South African traders had turned Botswana into a dumping ground for the flour.
Nkosi Mwaba the Group Corporate Affairs Manager at Bolux says should the Government remove the 15% levy, unrestricted dumping will lead to the closure of local millers which will lead to the loss of hundreds of direct and indirect employment opportunities.
“As a result, the Botswana Government would indirectly support thousands of employment opportunities in the South African milling sector to the detriment of employment opportunities at local millers in Botswana.
Botswana as a sovereign country must have the right to introduce policies to support its domestic industries,” he said.
The local millers also argue that in order to remain financially viable, in view of the small size of the local market, they need to run integrated operations which include maize and wheat milling.
Their worry is that should any of these legs are forced to shut down for any reason, the whole operation loses viability and closure will be forced. “The agriculture sector also depends on us for stock-feed.
The three big Botswana feedlots which supply the bulk of the cattle to BMC depend on Bolux for approximately 70% of their chop and up to 100% of their bran requirements.
Bran and chop are vital constituents of the feed provided to cattle.
The red meat industry will not have any access to local chop and bran and will thus be at the mercy of South African exporters selling at inflated prices to Botswana,” Mwaba said and added that the local poultry industry will similarly not have any access to chop and bran.
Botswana Exporters and Manufacturers Association(bema) has since sought the financial and technical assistance of the Southern Africa Trade Hub.
The hub has since made recommendations for government to retain the levy and investigate its adequacy. It has also recommended that alternative measures be sought to save the country’s milling industry.