FZIMBABWE’s private sector has thrown the kitchen sink at President Emmerson Mnangagwa’s embattled government warning of more company closures and job losses if government does not set up a transfer mechanism that will allow business to convert their RTGS balances into hard currency.
Manufactures say they have been struggling to remain viable since the backend of 2018 when the Reserve Bank of Zimbabwe begun failing to provide adequate foreign currency to manufacturers for the importation of raw materials.
Their woes were compounded when government criminalised the purchasing of foreign currency from the parallel market where most businesses had turned to in a desperate bid to stay afloat.
At the same time government has outlawed the retailing of goods in foreign currency at the exclusion of RTGS and bond notes.
“As business we are saying there are companies that closed in November, others in December during the festive season up to now they have not opened because since October the foreign currency we were being allocated by RBZ has been drying up,” Confederation of Zimbabwe Industries Sifelani Jabangwe told industry players during a breakfast meeting on the available policy solutions for Zimbabwe.
“Then there was policy pronouncement at the end of the year pointing to the fact that that RTGS and Foreign Currency Accounts should be separated. Then there was another law that said those caught selling foreign currency will be arrested. This left companies stranded and meant they could no longer buy foreign currency where they were getting it (on the black market) fearing arrest. Now companies have sold out all their stocks and have RTGS in their bank account but don’t have a way to look for forex to enable them buy raw materials. So our plea is that government set up a transfer mechanism that will allow business to convert their RTGS balances into hard currency.
Jabangwe said the question of re-dollarisation was a difficult one as Zimbabwe might not have enough of the hard currency to cope with the demands of a dollarised economy.
Jabangwe added that Zimbabwe’s cost of doing business was higher than most of the countries in the region and this would ultimately make local products more expensive than foreign purchased goods.
The ideal situation was for the country to have its own currency, he said.
“Dollarising will probably not be ideal for this economy because we are most likely going to be overpricing and the goods coming from our neighboring countries will be cheaper and that’s why SI 122, which is currently under suspension came about because there was a flood of goods coming from our neighbours,” he said.
“The most important thing…For the purposes of tomorrow, for the manufactures is a mechanism to be put in place for businesses to trade their RTGS balances for foreign currency,if this not done more businesses are going to close down,” he added