Firms in distress over forex allocations

MANICALAND-BASED companies face mounting debt with foreign suppliers of raw materials, as they have not received their foreign currency allocations from the Reserve Bank of Zimbabwe for more than a fortnight.

Provincial chairperson of the Value Addition and Beneficiation cluster Mr Claudius Makwindi said foreign currency shortages had affected both large corporations and small and medium enterprises, as they were yet to receive forex from banks.

“The companies owe their suppliers substantial amounts of money in arrears and when they eventually receive the money, it will be diverted towards the settlement of these arrears instead of going towards production.

“For the past two weeks some companies have not received any foreign currency from RBZ despite having been cleared to receive it,” Mr Makwindi told stakeholders attending a provincial first quarter development review meeting held in Mutare on Wednesday.

Mr Makwindi said the unavailability of foreign currency had negatively affected the operations of most companies in Manicaland, with most of them operating below capacity, while some small and medium enterprises have had to terminate operations.

This, he added, had affected production as well as procurement of equipment and most companies have resorted to cutting down on production, with some suspending operations.

He further indicated that the unavailability of foreign currency had also affected the procurement of equipment, which saw most companies resorting to using outdated and malfunctioning equipment placing employees at risk.

Mr Makwindi, however, commended some companies for taking the initiative to incorporate producers through engagement with farmers on a contractual basis, creating employment as well as providing them with a market in the process.

“Cairns Food has remained resolute in its contract farming project, as they continue to support and empower local communities in Manicaland by continuing to support farmers in growing beans and tomatoes.

“The company has also completed refurbishing their tomato puree production line and will be contracting farmers to grow tomatoes,” he said.

He, however, advised companies to help in creating a fair space for producers as well as ensure that producers did not bear unnecessary costs.

Meanwhile, Manicaland provincial planning officer Mr Fungai Munyama expressed concern over illegal settlers whom he said had remained a major challenge to companies in the timber industry.

“This has resulted in underutilisation of the timber areas as most timber companies have had to navigate around these illegal settlements,” he commented.