Forex shortages choking industry growth

Published: 23 April 2018

The continued shortage of foreign currency is making it difficult for industries to import raw materials for use in their production processes, hampering the growth of manufacturing in Zimbabwe, experts from different sectors of the economy have said.

The Government in 2016 introduced bond notes as a way of bringing liquidity and stability in the economy but many industries have shut down as the country does not have adequate foreign currency. Oil Expressers Association of Zimbabwe chairperson Busisa Moyo recently said challenges involving allocation of foreign currency to the sector remained critical, affecting industry performance.

"The cooking oil industry is operating at between 30 percent and 40 percent capacity, weighed down by the shortage of foreign currency to import key raw materials. The situation remains critical and we trust that the availability of soya beans from the local crop and tobacco foreign currency inflows will buoy performance for the quarter commencing April.

Confederation of Zimbabwe Retailers president Denford Mutashu shared the same sentiments that shortages of foreign currency continued to hinder industry growth in Zimbabwe urging the government to move fast in addressing the issue.

"The current foreign currency shortages is a critical matter which requires urgent government attention as it has affected business by and large," he said.

"For production to increase in Zimbabwe, we need foreign currency which is currently limited hence the drive to attract foreign direct investment and fresh capital through the "Zimbabwe is open for business" mantra.

The Zimbabwe Textile Manufacturers' Association appealed to the government to prioritize the textile sector when disbursing foreign currency to ensure members met their payments obligations and remain in business.

Association secretary general Raymond Huni said the industry required an urgent foreign currency injection to prevent its total collapse.

"We have a situation where the biggest blanket and linen manufacturer is struggling to get foreign currency to remain in business. The company supplies blankets to the army, hospitals, hotels and schools and is obligated to the nation for the supply of blankets and bedding accessories.

"The company has a staff complement of 800 people who are at risk of losing their jobs if the company fails to get money (foreign currency) to purchase raw materials.

- New Ziana

Tags: Forex,