NRZ seeks forex exemption

13 Jan, 2020 - 00:01 0 Views
NRZ seeks forex exemption Mr Lewis Mukwada

The Chronicle

Oliver Kazunga, Acting Business Editor 

THE National Railways of Zimbabwe (NRZ) has approached Government seeking to be allowed to  receive payments in foreign currency from exporters transporting their goods by rail. 

In June last year, the Government outlawed the use of multiple currencies through Statutory Instrument 142 of 2019 which compels all forms of local transactions to be done using the Zimbabwe dollar.

Prior to the latest development, the country was using a basket of currencies, which was adopted in 2009 when the country scrapped its domestic currency at the height of hyperinflation.

Addressing a media briefing soon after the NRZ board and management meeting with officials from China Mining Logistics Holding Company in Bulawayo last week, NRZ general manager, Engineer Lewis Mukwada said: “Before the coming into effect of SI 142, we had made arrangements for exporters to remit to us the railage cost in hard currency. 

“But with SI 142, we are now paid in local currency and we are as a result finding it difficult to raise forex to hire locomotives or buy spare parts.

“We have since engaged Government and we had meetings with the Permanent Secretary of Finance (Mr George Guvamatanga) and the Minister (Professor Mthuli Ncube) and they have promised to look into the issue,”  said Eng Mukwada.

NRZ, which requires about US$1,9 billion in the long-term to recapitalise operations, has not been spared by the adverse macro-economic environment Zimbabwe has been reeling under for close to two decades. This has seen the railway company’s freight volumes whittling down from a peak of 18 million tonnes per year in the 1990s to 2,8 million tonnes last year. 

Since 2016, Eng Mukwada said, NRZ has been registering an upward trajectory of cargo volumes of between 2,7 million tonnes to 3,4 million tonnes in 2018 before dropping to 2,8 million tonnes last year. 

“In terms of volumes we have been on an upward trend. We have done 2,7 million in 2016, 3,1 and then 3,4 million and we had expected to maintain that trajectory but 2019 was a challenge, we ran into a number of challenges,” he said. 

Eng Mukwada said the locomotives NRZ secured from Transnet as an interim solution to resource gaps his organisation was facing, improved the entity’s operational capacity. 

Under the interim arrangement, NRZ was leasing 13 locomotives, 200 wagons and 34 passenger coaches. 

“The locomotives, wagons and passenger coaches helped us quite a bit in 2018. We have since sent  five of those locomotives for servicing and the arrangement had been that we hire replacement from elsewhere, “ said Eng Mukwada. 

He said they had planned to refurbish 10 locomotives but were able to do only two due to shortage of spares which require forex. 

In 2018, NRZ refurbished seven locomotives. 

Eng Mukwada however said last year they refurbished 365 wagons against a target of 220.

“On wagons we did outperform our target, we refurbished 365 wagons against a target of 220. 

“This was made possible by the fact that we had spares in stock and we are also getting some spares from wagons we are selling as scrap,” said Eng Mukwada. [email protected]

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