FIRMS IN FOREX CHAL­LENGES RBZ bat­tles long for­eign pay­ment queues Zimra blasts prof­i­teer­ing busi­nesses

Chronicle (Zimbabwe) - - Worldwide - Pros­per Ndlovu Busi­ness Ed­i­tor

PRO­CURE­MENT of im­ported raw ma­te­ri­als and cap­i­tal equip­ment has be­come a night­mare for most com­pa­nies as the Re­serve Bank of Zim­babwe (RBZ) bat­tles long for­eign pay­ment queues, an of­fi­cial has said.

Zim­babwe Rev­enue Author­ity (Zimra) board chair Mrs Wil­lia Bony­ongwe re­vealed this yes­ter­day in the tax author­ity’s rev­enue per­for­mance re­port for the first quar­ter ended 31 March 2017.

She ac­knowl­edged the dif­fi­cult macro-eco­nomic en­vi­ron­ment that has seen in­dus­try op­er­a­tions be­ing ham­pered by de­lays in for­eign pay­ments due to the tight liq­uid­ity sit­u­a­tion in the econ­omy and bit­ing cash short­ages.

The begin­ning of the to­bacco mar­ket­ing sea­son mid­last month as well as the im­ple­men­ta­tion of Statu­tory In­stru­ment 64 of 2016, which re­stricts im­por­ta­tion of lo­cally man­u­fac­tured prod­ucts, have not eased the cri­sis as much as an­tic­i­pated, de­spite im­prove­ment in prod­uct qual­ity and vol­ume of sales, she aid.

“Un­for­tu­nately the liq­uid­ity sit­u­a­tion wors­ened again dur­ing the first quar­ter of 2017. Pro­cure­ment of im­ported raw ma­te­ri­als and cap­i­tal equip­ment has be­come a night­mare and there are long for­eign pay­ment queues at the Re­serve Bank of Zim­babwe, eat­ing into the gains of S.I.64 of 2016,” she said.

“Re­gional cur­ren­cies con­tinue to weaken against stronger United States dol­lar, thus wors­en­ing Zim­babwe’s ex­port com­pet­i­tive­ness.”

Mrs Bony­ongwe, how­ever, said the re­spon­si­bil­ity to ad­dress the liq­uid­ity sit­u­a­tion does not lie with the RBZ alone but was the duty of all Zim­bab­weans.

“It is the duty of every­one to act re­spon­si­bly and in the na­tional in­ter­est in how cash is han­dled for the coun­try to re­store sta­bil­ity in this area,” she said.

The apex bank has blamed il­licit cash deal­ings such as money laun­der­ing and ex­ter­nal­i­sa­tion for haem­or­rhag­ing for­eign ex­change from the econ­omy. Re­sis­tance to use of plas­tic money has also com­pounded the sit­u­a­tion as more de­pos­i­tors con­tinue to de­mand cash ev­i­denced by con­tin­ued queues at banks.

Mrs Bony­ongwe also be­moaned the resur­gence of in­fla­tion, which is ris­ing fast with the year on year rate break­ing into the pos­i­tive zone for the first time in 29 months. In­fla­tion, ac­cord­ing to Zim­stat, gained 0.71 per­cent­age points in Jan­uary this year from -0.65 per­cent to 0.06 per­cent in Fe­bru­ary 2017.

“This trend is very dan­ger­ous given that the dom­i­nant cur­rency is the US dol­lar, which is cur­rently strength­en­ing. There­fore, hav­ing the US dol­lar as the dom­i­nant cur­rency worsens our ex­port com­pet­i­tive­ness.

“Un­der the cir­cum­stances, the only so­lu­tion to the liq­uid­ity cri­sis is in­creas­ing pro­duc­tion and ex­ports to earn for­eign cur­rency,” said Mrs Bony­ongwe. THE Zim­babwe Rev­enue Author­ity (Zimra) has ac­cused some busi­nesses of frus­trat­ing eco­nomic growth through high mark-ups and backed calls to re­view the coun­try’s pro­duc­tion cost struc­ture so as to boost eco­nomic growth.

Zimra board chair Mrs Wil­lia Bony­ongwe said yes­ter­day there was an ur­gent need to ad­dress the pric­ing prob­lem adding that most com­pa­nies have failed the com­pet­i­tive­ness test be­cause of huge markups on their prod­ucts.

She said there was an ur­gent need for the na­tion to look at the lo­cal cost struc­tures such as labour in­clud­ing ex­ec­u­tive pack­ages, util­i­ties and the myr­iad of levies.

“Prof­i­teer­ing is a lo­cal dis­ease. Gov­ern­ment must also se­ri­ously look into the mark ups of those who get li­cences to im­port goods. This is not a call for price con­trol, but all th­ese fac­tors im­pact neg­a­tively on Zim­babwe’s ca­pac­ity to in­crease pro­duc­tion and ex­ports,” said Mrs Bony­ongwe.

“There is just no jus­ti­fi­ca­tion for the cur­rent ex­ces­sive mark-ups on im­ported goods for fer­tilis­ers, chem­i­cals and other in­puts, equip­ment, even medicines.

“For ex­am­ple, fol­low­ing the aborted in­tro­duc­tion on Value Added Tax (VAT) through Statu­tory In­stru­ment 20 of 2017 on se­lected ba­sic com­modi­ties, the prices were never ad­justed af­ter it was re­pealed.”

The Zimra board chair said the high mar­gins were

She, how­ever, re­it­er­ated that prospects looked brighter for the coun­try’s econ­omy with growth pro­jec­tions of 3.7 per­cent this year from the ini­tial 1.7 per­cent. Pres­i­dent Mu­gabe has said more eco­nomic gains would be reg­is­tered this year fol­low­ing the good rains and an­tic­i­pated bumper har­vest.

Mean­while, Zimra has sur­passed its first quar­ter rev­enue col­lec­tions by 6.09 per­cent to $862.47 mil­lion from the tar­geted $812.94 mil­lion.

Dur­ing the pe­riod the author­ity’s net rev­enue grew

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