THE Reserve Bank of Zimbabwe (RBZ) has moved in with more allocations of foreign currency to manufacturing firms under the $600 million nostro stabilisation facility to enable companies to procure critical raw materials and increase supply of goods.
Confederation of Zimbabwe Industries (CZI) president, Mr Sifelani Jabangwe confirmed this yesterday.
The move follows recent speculative events, which precipitated loss of confidence in the market and sparked panic buying of basic consumer goods.
“The RBZ has already moved in with more allocations of foreign currency and manufacturers have proceeded to increase production resulting in more products on the shelves,” said Mr Jabangwe in a statement.
He said a frenzy of panic buying was taken advantage of by speculators who bought goods and resold them at inflated prices.
Mr Jabangwe implored manufacturers to remain focused despite the prevailing liquidity challenges and also urged them to cooperate with Government in instilling confidence in the market.
The apex bank secured the $600 million nostro stabilisation fund from AfreximBank as part of measures to improve liquidity in the economy and boost domestic production.
Mr Jabangwe said the recent panic buying craze occurred when the stocks were low, but adequate for normal consumption.
He said the low stocks were created by foreign exchange shortages which resulted in firms failing to buy raw materials.
Foreign currency supply is generally low in the economy between August and March when there is no activity on the tobacco auction floors.
Tobacco is one of the major foreign currency earners hence when there is trade of tobacco at the auction floors, availability of forex improves.
Mr Jabangwe said the panic buying spree happened on a weekend when suppliers were closed and could not respond to stock outs.
He said CZI would continue to push for value chain development and working with relevant authorities and stakeholders towards strengthening and reviving value chains as part of the long term solution to raw material supply challenges.
Mr Jabangwe, however, said the nostro stabilisation package was a short term measure and challenged industries to focus on long term strategies that require boosting of exports and collective effort in instilling discipline and market confidence.
He urged firms to continue increasing their production capacities to substitute imports and save the scarce foreign exchange resources as well as reduce the fiscal deficit to manageable levels.
The CZI boss assured the public that given continued flow of foreign currency, the manufacturing sector would be able to continue supplying goods on the market.
“The Confederation of Zimbabwe Industries would like to state that though the situation is difficult, the economy is improving. The improvement can be seen through improved revenue collections, reduced trade deficit and food security. The improvements have come about despite the absence of major external support,” said Mr Jabangwe.