News of the South HARARE — Zimbabwe’s
apex organisation for industries has warned that most of the country’s
manufacturers could shut down by month end if the government does not adopt
urgent measures to solve the country’s currency crisis.
The troubled southern African country is facing its worst
economic crisis in 10 years as a result of a critical shortage of foreign
currency to import raw materials for its industries.
Manufacturers say they owe payments of over $480m as at the end
President of the Confederation of Zimbabwe Industries (CZI)
Sifelani Jabangwe told journalists at the Confederation of Zimbabwe Retailers
breakfast meeting in Harare on Thursday that the country’s industries are in a
“As indicated earlier, most of the companies do not have raw
material supplies that go beyond January as most of our suppliers cut us out on
stock and it is only payment that will unlock the supply lines. The reason is
we are eating into our lead times for bringing in goods.
“Most of the companies have to pay in the next 10 to 14 days for
the raw materials so that they do not close. If we start transacting after that
time, closure will be inevitable because we need about two to three weeks at
least for the goods to come in. Sometime in February a number of companies will
close,” Jabangwe said.
He said the biggest challenge faced by industries was a shortage
of foreign currency.
“Last year most of the companies lost between 70 to 80 days of
business, which is something that we want to avoid. The biggest challenge is to
do with foreign currency; as you recall by the end of 2018 there were policies
that were put in to separate the electronic money and the USD nostros, but
there is no mechanism between the two.”
Jabangwe said industries had received only 15% of their foreign
currency requirements in the last quarter of 2018.
“We believe it’s a situation that can quickly be unlocked if the
law that was put in place to criminalise the trade between bond note and the US
dollar is removed. We are caught in a logjam and this has been our request to
government to clear away the law or else avail currency but we all know that
the government does not have much currency to provide such allocations,”
Industry and commerce minister Mangaliso Ndlovu was not
available for comment as his mobile phone was unreachable while his deputy Raj
Modi told Business Day that he would only be in a position to comment on
Last week, Ndlovu told our sister paper The Sunday Times that
companies that sell in US dollars risk losing their licences.
In an interview with Business Day in Harare, economist Dr Gift
Mugano said government needs to hold urgent dialogue with affected industries.
“It is a given that industry is facing enormous challenges in
relation to foreign currency shortages. The two need to come together and find
solutions. On one hand, companies should not threaten government that they will
close unilaterally while on the other hand government should also listen to the
concerns raised by industry and propose the best way forward,” he said.
By Prince Akpah. Accra, Ghana. (News of The ..
News of the South HARARE — ..
One of Zimbabwe’s leading commodity manufacturers ..
Self-styled communications strategistist ..