IN­DUS­TRY WANTS AC­CESS TO FOREX:

The Herald (Zimbabwe) - - Front Page - Africa Moyo Senior Busi­ness Reporter

THE Con­fed­er­a­tion of Zim­babwe In­dus­tries (CZI) in­sists the econ­omy will not col­lapse so long as Gov­ern­ment al­lows man­u­fac­tur­ing firms to buy enough for­eign cur­rency to im­port needed in­puts.

Most man­u­fac­tur­ers need some im­ported raw ma­te­ri­als even when most of their costs are in­curred in Zim­babwe. They ei­ther buy these with al­lo­ca­tions from the Re­serve Bank of Zim­babwe, ex­port part of pro­duc­tion to earn forex, or use a forex earner as a mid­dle­man and pay his markups. Many want to go a step fur­ther and be able to buy forex when needed on par­al­lel mar­kets if the RBZ can­not al­lo­cate enough for this mi­nor­ity of im­ported in­puts.

CZI pres­i­dent Mr Sife­lani Ja­bangwe said the crim­i­nal­i­sa­tion of par­al­lel mar­ket trade in for­eign cur­rency has left a lot of com­pa­nies that are not on the Re­serve Bank of Zim­babwe (RBZ) pri­or­ity list in a dilemma when it came to procur­ing im­ported in­puts.

He said this dur­ing a break­fast meet­ing or­gan­ised by the Con­fed­er­a­tion of Re­tail­ers Zim­babwe in Harare on Thurs­day last week.

“. . . we have got chal­lenges but from a CZI per­spec­tive, we be­lieve that the sit­u­a­tion is not a dis­as­ter pro­vided the right is­sues are taken (into con­sid­er­a­tion).

“The is­sues that we are deal­ing with are the poli­cies.

“The poli­cies are pro­mot­ing the in­for­mal sec­tor at the mo­ment when we are the ones that gen­er­ate US dol­lars,” said Mr Ja­bangwe.

He said some of the poli­cies “crim­i­nalise do­ing busi­ness”.

Up­per­most in Mr Ja­bangwe’s mind is the law, which was en­acted late last year, amend­ing the Ex­change Con­trol and Money Laun­der­ing and Pro­ceeds of Crime Act, pre­scribes a 10-year jail term for con­victed of­fend­ers and a for­fei­ture of the money.

Ac­counts of il­le­gal for­eign cur­rency will also be frozen.

Il­le­gal for­eign cur­rency deal­ers are now op­er­at­ing un­der­ground, and some com­pa­nies are re­port­edly scared to ap­proach them for forex, re­sult­ing in op­er­a­tional chal­lenges when they need im­ported in­puts.

Mr Ja­bangwe said it was im­per­a­tive that the poli­cies be tweaked to al­low com­pa­nies to op­er­ate vi­ably.

“The three things that we are con­cerned about are busi­ness vi­a­bil­ity, prod­uct avail­abil­ity and pric­ing sta­bil­ity.

“At the mo­ment, be­cause we have mainly fo­cused on pric­ing, it’s now start­ing to af­fect busi­ness vi­a­bil­ity and prod­uct avail­abil­ity.

“We need at the very least a trans­fer mech­a­nism be­tween RTGS and US dol­lars. The Mon­e­tary Pol­icy Re­view (state­ment) done last year sep­a­rated those two, US dol­lars and RTGS. At the same time, we don’t want the crim­i­nal­i­sa­tion of forex trad­ing,” said Mr Ja­bangwe.

He said some com­pa­nies have raw ma­te­ri­als that may last them about a month and there was need to in­sti­tute mea­sures speed­ily to en­sure fresh sup­plies are or­dered.

Mr Ja­bangwe said there was noth­ing amiss with busi­ness re­quir­ing mech­a­nisms for buy­ing US dol­lars since it is an is­sue enun­ci­ated in na­tional blue­print, the Tran­si­tional Stabilisation Pro­gram (TSP).

“What we are ask­ing for is al­ready in the Gov­ern­ment doc­u­ment that we have. So the is­sues that we have are to make sure that we move for­ward.

“Busi­ness needs US dol­lars to pro­cure raw ma­te­ri­als,” he said adding that man­u­fac­tur­ers are ready to ac­cept RTGS pay­ments “pro­vided there is a trans­fer mech­a­nism for an in­sti­tu­tion to con­vert it to USD”.

Mr Ja­bangwe said some com­pa­nies feel that if they sold their re­main­ing stock in US dol­lars, they would be able to re­stock.

“The pol­icy is­sues are the ones that need to be ad­dressed.

“We also need to con­tinue to com­mu­ni­cate (with pol­i­cy­mak­ers and labour).

“We need to be clear of what Gov­ern­ment in­ten­tions are so that we don’t sec­ond guess be­cause we need to be able to plan for our busi­nesses and take them for­ward. But I need to em­pha­sise that the econ­omy is not in a bad place pro­vided we take the right pol­icy mea­sures,” said Mr Ja­bangwe.

Mr Ja­bangwe

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