A stitch in time saves nine

THE good thing about firms whose shares trade on stock exchanges is that they are compelled to give regular market updates about developments taking place within their operations. In responsive economies, these firms command so much influence and respect that when they point out issues, governments take prompt action.

When these companies speak, their voices represent the bigger picture.

If they raise the red flag, it means their peers with interests in the same space would be facing pretty much the same hurdles — but there is a tendency by non-quoted firms not to speak out.

In its financial statements for the third quarter released last week, Unifreight Africa Limited, the Zimbabwe Stock Exchange-listed logistics operator, raised a very pertinent issue.

While trade in foreign currency for domestic transactions has been allowed, there are still many companies that transact in Zimbabwe dollars because the majority of the transactions they handle are Zimbabwe dollar-indexed.

These firms find it difficult to access cheaper foreign currency on the foreign currency auction system to fund operations, including the purchase of fuel.

Still, they require foreign currency to buy United States dollar-priced fuel, which is the bulk of the fuel available on the market.

The government tried to come up with a solution by making it mandatory for oil firms accessing United States dollars on the foreign currency auction system to sell the product in Zimbabwe dollars.

The idea was to make sure that commuters and other travelling members of the public won’t end up shouldering the of burden of high prices.

Now, as Unifreight said last week, it has been hard to access Zimbabwe dollar-priced fuel on the market.

Some of its delivery vehicles have been forced to spend hours on end in queues to access Zimbabwe dollar-priced fuel which is on high demand.

Generally, this fuel exists on paper because companies rarely access it.

When a national transportation system is grounded by factors like fuel, goods won’t reach their destinations in time.

The chain of negative consequences is long, including product shortages, which lead to high prices and inflation.

The problems that Unifreight highlighted call on government to act immediately before such hurdles spiral out of control.

We urge government to come up with concrete solutions to the fuel problems as explained by Unifreight, and many other challenges affecting companies.

Zimbabwe cannot afford to slip into another crisis, given the scale of issues that beg for attention.