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Patrick Chitumba – [email protected]

THE Government needs to raise the foreign currency retention rate of 12 percent that is remitted by mining companies to a more robust 50 percent. Such a move would invigorate the economy and spur the growth of local industries, a vital step towards reducing unemployment and addressing the prevailing trade imbalances, the chief executive officer of Buy Zimbabwe, Mr Munyaradzi Hwengwere has said.

Miners say they want to be allowed to keep 70 percent of their dollar earnings to allow them to import equipment and mining consumables, including fuel. Mining generates most of the export earnings for the country which is facing a severe shortage of dollars.

In an interview on the sidelines of the Zimbabwe National Chamber of Commerce (ZNCC) Midlands Annual Awards ceremony held over the weekend, Mr Hwengwere said for the economy to grow, there is a need to develop local industries.

“Right now mining is the largest foreign currency earner. Sadly, only 12 percent of the mining order book is domesticated in Zimbabwe which means the ability to create employment in other sectors is very low,” he said.

Mr Hwengwere said the first thing the Government needs to do is to significantly reduce the 12 percent to 50 percent.

“There is a need for the Government to force mining companies to retain at least 50 percent of foreign currency earnings to the country against the current 12 percent which leaves the country in dire need of foreign currency earnings. This development means mining companies will need to work on programmes to make sure that they support local industries and local businesses,” he said.

Added Mr Hwengwere, “Unless that happens we will remain in the same vicious circle of currency problems that we are having in the country. We still have huge trade imbalances, US$17 billion over the past 20 years that we have taken out to other countries.”

He said what needed to be done was the implementation of the Local Content Policy passed by the Cabinet.

“Its implementation of the local content policy that was passed by Cabinet to say mining companies cannot have anything above 50 percent. That needs to be implemented, there is a policy already but the implementation has not been thorough.

“So we just need to make sure that people know what they need to do, we need to make sure that for example bore mills and a lot of equipment can be secured in Zimbabwe.  Let’s just cut our imports, let us use the money to support local industries,” said Mr Hwengwere.

He said over 60 percent of foreign currency earnings in the mining sector come from Zimplats, Mimosa, and Unki Mines. As Buy Zimbabwe, he said they are advocating for the total ban of raw material exports to grow the local industries.

Meanwhile, addressing delegates and businesspeople attending the awards ceremony, guest of honour and former Midlands State University (MSU) Vice-Chancellor Professor Ngwabi Bhebhe said ZNCC has been hosting these awards over the years to celebrate excellence in various business endeavours, to recognise and honour achievements as well as to demonstrate and inspire innovation.

Some of the award categories included Businessman and Businesswoman of the Year, Young Entrepreneur of the Year, Exporter of the Year, Financial Institution supporting Micro, Small and Medium Enterprises award, Tertiary Institution award (Education 5.0 Implementer) and Best Emerging Business of the Year, Innovation award.

From the winners of the provincial awards, ZNCC is then able to determine winners at national level during the ZNCC congress scheduled for June 28 to 30 in Victoria Falls Said Prof Bhebhe, “The progression of industrial growth that we have witnessed in recent years and these business awards celebrations are testimony of the resilience and commitment of local business towards the economy and well-being of the nation.”

He said the growth of the economy has been positive adding that the Government and the private sector, among other key stakeholders need to maintain the spirit of engaging each other at all levels to ensure that this progression is sustained

“As a country we continue to face multifaceted challenges in the business environment and it is important to continue working together to find lasting solutions. Indeed, prices of goods and services are continuously going up with both global and domestic factors at interplay,” said Prof Bhebhe.

He said just a month ago, there was a stakeholder engagement with the private sector representatives such as ZNCC, Confederation of Zimbabwe Industries (CZI), Confederation of Zimbabwe Retailers (CZR), and Grain Millers Association of Zimbabwe (GMAZ), among others, to discuss the rapid increases in prices and stock outs in a few products.

Prof Bhebhe said such engagements help to continuously address emerging issues and to find lasting solutions in order to foster macroeconomic stability.

He said the Government through the Ministry of Industry and Commerce and the Ministry of Finance and Economic Development are seized with the concerns of price stability and economic growth and will continue to work with all stakeholders for the sake of stability and growth. — @pchitumba1