Industry decries currency distortions

20 Feb, 2020 - 00:02 0 Views
Industry decries currency distortions

The Chronicle

Oliver Kazunga, Senior Business Reporter

CAPTAINS of industry in Bulawayo have said the prevailing inconsistencies regarding local and foreign transactions are creating severe distortions in the market, which negatively affects business operations.

Despite the abolishment of the multiple currency regime in June last year, foreign currency trading is rampant with the informal sector taking the lead, including determining exchange rates, industrialists said. 

In their submissions during a breakfast meeting hosted by the Ministry of Industry and Commerce yesterday, the industrialists said despite a policy position on mono-currency, the forex craze was being perpetrated by some established businesses in fuel and other service sectors and selected Government agencies that deal with customs duty and registry who also transact in foreign currency. They called on Government to urgently come up with measures to deal with such inconsistences.

Zimbabwe National Chamber of Commerce (ZNCC) regional head for Matabeleland, Mr Godwin Muoni, said there should be a well-defined policy on the currency issue.

“We must have a clear-cut policy, which is well defined to allow business to plan. As we are speaking some are transacting in US$, some are refusing the bond notes,” he said.

“Right now, as we are speaking, at most garages there is no fuel but there are garages, which have fuel that is sold in US$, which we know. So, are we using the US$ or the bond notes (local currency), which currency are we using?”

The ZNCC executive said given the logjam caused by policy inconsistency on currency, it was imperative for the country to interrogate the matter and come up with a clear policy direction.

“We have to brainstorm and interrogate this issue of currency to say what do we want. Was the timing right on introducing our local currency. If the timing was not right what do we do. If we interrogate that question and get an answer, then we are able to move forward as a people,” he said.

Industry leaders said due to the prevailing power and fuel challenges, productive time was being lost as workers spend time queuing for fuel instead of producing.

Confederation of Zimbabwe Industries (CZI) Matabeleland Chapter president, Mr Shepherd Chawira, said given incomes erosion after currency shift, specific measures were needed to boost aggregate demand.

“It must be a priority of our Government . . . incomes have been eroded by austerity measures adopted by Government and something needs to be done to stimulate spending. We have very low capacity utilisation across the board. Liquidity challenges are seriously biting in this region and seriously affecting local companies. In areas such as Plumtree, Gwanda, and Beitbridge, people understand the Rand and Pula better than they understand their own currency. EcoCash, while helping out, is expensive for rural folk,” he said.

Mr Chawira said Matabeleland region also needs to know how much of the foreign currency is being allocated to the region by the Government through the Reserve Bank of Zimbabwe. 

Commenting on the issue on Twitter, Presidential Advisory Council member and United Refineries chief executive, Mr Busisa Moyo, also said “the economy has largely remained in a ‘multi-currency’ framework at transaction and functional level”. He, however, said the proportions differ from sector to sector, adding that. “the payment methods is a polyglot of rtgs, zipit, swipe cards, EcoCash, US$ notes and rand,” he said.

Bulawayo Leather Cluster chairman, Mr Fungai Zvinondiramba, said policy inconsistency on the currency front was a major barrier.

“The macro-economic environment is not very enabling even though we have put in place some measures to try and sort out some of the challenges as business.

“We had, as a sector, to approach the Zimbabwe Parks and Wildlife Management Authority because the authority is rating licence fees in US$. We approached them to sort out the matter, Government should be engaging because it creates policies that affect us,” he said. [email protected]

Share This: