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Midlands Correspondent
BUSINESS lobby group, the Zimbabwe National Chamber of Commerce (ZNCC), has called on the central bank to expedite the clearance of transactions being done on the Real Time Gross Settlement (RTGs) facility. In the wake of biting cash shortages experienced in the past few months, the Reserve Bank of Zimbabwe (RBZ) is urging businesses and the general public to embrace plastic money usage to minimise demand for hard cash.

This has seen an upsurge in plastic money transactions with Point of Sale (POS) transactions increasing by 17 percent at the end of June. ZNCC Midlands Region chairman, Julian Mashavakure, however, told Chronicle Business that RTGs clearances were taking as much as four weeks to clear, a development he said can create shortages of certain products on the market.

“We are having challenges with the RTGs transfers especially for the procurement of critical raw materials we are importing from outside the country.

“These are taking up to four weeks to be cleared and what that would then do is that it will start creating shortages because production is heavily affected. When that happens prices will increase and it is therefore important for relevant authorities to improve the efficiency of the RTGS system,” he said.Gweru based industrialist, Tatenda Karimazondo concurred saying the slow pace in clearing the RTGS system might cripple local production forcing businesses to rely on imports.

Zimbabwe is battling an average annual import bill of up to $7 billion with trade deficit sitting at $3 billion. Analysts blame the trend for suffocating local industry viability and exporting jobs due to the influx of cheap imports.

“The central bank has done well in its robust drive to promote the use of plastic money but the inefficiencies of the RTGs may result in us being trapped in a vicious circle. On one end we want to reduce the import bill by stimulating local production but on the other end we are delaying payments, which result in delays in the procurement of raw materials, which has a direct effect on production.

“It is my plea to the central bank to look at this issue because if this continues unabated then we might slide back to low capacity utilisation levels, which will result in industry shedding off more jobs,” said Karimazondo who is the operations director for Midlands Metals.

Two weeks ago the Government promulgated Statutory Instrument 64 of 2016, which prohibits importation on the open general import licence several products that are manufactured locally. The move is meant to protect local firms and assist them to retool while boosting domestic production and competitiveness.