The Zimbabwean economy has presented a formidable challenge to businesses in recent months. Many companies have either significantly scaled back their operations or been forced to close their doors entirely. High-profile examples include Triangle Limited, which has announced plans to retrench approximately 1,000 employees, the complete withdrawal of Standard Chartered Bank from the Zimbabwean market, the closure of Deloitte’s Zimbabwe office, significant branch closures by Food World in Harare’s central business district, and the departure of Choppies from the country. Given this context, it was understandable that speculation arose concerning Zhongtong, the Chinese bus manufacturing company, particularly when a notice suggesting their closure circulated on social media. However, as it turns out, this was indeed “fake news.”

Zhongtong Denies Suspension of Operations

Initial reports indicated that Zhongtong had suspended operations in Zimbabwe as of 14 January 2025. This sparked concern due to the reliance on their buses for public transport. These buses have become a mainstay of the local transport scene, serving as a popular option for both short- and long-distance travel.

However, Zhongtong Zimbabwe (Pvt) Ltd, via their legal representatives, MLP Attorneys, issued a statement on 15 January 2025, refuting these claims. The company affirmed that it remains fully operational and is committed to providing high-quality services to its customers. They have urged clients, stakeholders and partners to disregard the false information.

This denial came swiftly after the initial announcement of suspension had gone viral. It underlines the speed with which misinformation can spread, especially concerning a business that has a significant impact on public transport and people’s livelihoods.

The Initial Suspension Announcement

The reason why Zhong Tong had to issue a denial is because there was an announcement doing rounds on social media. The initial announcement of the suspension was claimed to be from Zhengzhou Bus Zimbabwe, trading as Zhong Tong Bus Zimbabwe. This brief statement was dated 14 January, and stated that the company had suspended business operations with immediate effect. The notice did not disclose the reasons for this decision but thanked the company’s customers for their support.

It is notable that the initial announcement was brief and did not contain any explanation of the reasons for the suspension. It is possible that the initial announcement was fake although it’s not clear who would benefit from making such false claims. It is also possible that Zhong Tong issued the statement themselves but later backtracked. It is not uncommon for companies and individuals to claim an initial communication was fake news especially when they later change their minds of discover that their earlier position was controversial.

The New Statutory Instrument 194 of 2024

In addition to the social media notice, the apparent confusion surrounding Zhongtong’s operations may be linked to recent changes in government policy. The Zimbabwean government recently removed the suspension of duty exemptions on fully assembled public service buses. This measure is aimed at promoting the local industry by making the importation of fully assembled buses more expensive.

To offset this, a new Statutory Instrument, 194 of 2024, was published on 30 December 2024. This instrument suspends customs duty on semi-knocked-down (SKD) bus kits imported by approved assemblers for assembly within Zimbabwe. This suspension will be in place for five years, from 1 January 2025, to 31 December 2029.

The government’s intention is clear; they seek to incentivize local assembly of buses and reduce the dependence on fully assembled imports. This move would benefit local businesses and contribute to job creation.

What does this mean for Zhongtong?

The government’s policy shift likely presents a significant challenge for companies like Zhongtong that have been importing fully assembled buses. The new duty structure makes it more expensive for them to operate in this manner. However, the new rules also open up new opportunities for companies willing to shift to local assembly. By importing semi-knocked-down bus kits rather than fully assembled buses, the company can benefit from the duty exemption.

It’s crucial to note that despite their denial of suspension of operations, this does not mean everything will remain the same. Zhongtong and other bus suppliers may have to re-evaluate their strategies in light of the new government policy.

The Debate About Local Assembly

The situation with Zhongtong highlights a larger debate about the need to promote local assembly and manufacturing. Some have argued that companies like Zhongtong and Yutong have not been contributing sufficiently to employment creation in Zimbabwe because they import fully assembled buses rather than establishing local assembly plants. The new statutory instrument seems to be an attempt to address this concern.

However, others argue that imported buses are more affordable and reliable, and that any measures that increase their cost will ultimately harm consumers. This is a valid point that needs to be balanced with the desire to grow local industry.

Zhongtong’s denial of suspension is welcome news for Zimbabweans who rely on their buses for transport. The company, alongside other major bus suppliers like Yutong, play a critical role in the country’s transportation network. However, the recent developments also highlight the need for bus companies to adapt to changing economic and regulatory conditions. Whether Zhongtong will embrace local assembly remains to be seen.

It is also vital that the government keeps an open ear to concerns from all stakeholders as it seeks to boost the local manufacturing sector. The key question is whether these measures will result in a strengthened local bus manufacturing industry that benefits both businesses and the people of Zimbabwe.