SMEs use auction funds to procure machinery Mr Hafiz Naeem

Sikhulekelani Moyo, Business Reporter

SMALL and medium enterprises in Bulawayo who are benefiting from the auction system say they have utilised the funds to procure critical modern machinery and raw materials which have assisted in boosting capacity utilisation.

Players said they now produce goods that compete favourably in the market. The auction system was introduced to improve access to foreign currency by the productive sector of the economy.

Prior to the platform companies sourced forex from the parallel market where it was inordinately priced.

Since its commencement in June 2020, the official forex trading platform has been applauded for helping the growth of the production sector through increased formal access of scarce forex resources.

Bulawayo Chamber of Small and medium enterprises (SMEs) chairperson, Mr Coustin Ngwenya told Business Chronicle that the auction system has positively transformed operations of their members.

“SMEs managed to access the forex at reasonable rates, this enabled them to buy modern machinery and raw materials,” said Mr Ngwenya.

“This also enabled them to produce goods that compete favourably in terms of prices on the market. It also stabilised our currency against other currencies. That has enabled SMEs to maintain consistency in price models of their products.”

Reserve Bank of Zimbabwe (RBZ) says since 2020, the auction system has channeled about US$3,7 billion to both SMEs and main auction.

From the cumulative amount allotted to businesses, the bulk of the foreign currency continues to go towards the procurement of raw material, machinery and equipment.

In December last year, Pakistani Investment Company, Flynote Investment Private Limited managing director, Mr Hafiz Naeem commended Government’s effort to provide businesses with easy access to foreign currency through the auction system.

“We’re also beneficiaries of the foreign currency auction system, and the platform has allowed us access to forex to mobilise equipment for our business,” he said.

Flynote Investment Private Limited is based in Bulawayo and it is the owner of the Evergold brand, which produces mealie-meal, rice, and flour and recently has established a biscuit and stock feed plant.

Flynote Investments Private Limited Group Human Resources Manager, Mr Moses Mashavave shows a biscuits packaging machine at the factory in Bulawayo. (Picture by Fortunate Nkomo)

Meanwhile, recently, the central bank said it has cleared all outstanding foreign currency allocations on the auction system, attributing the positive development to improved foreign currency inflows in the country.

Going forward, the central bank said it will strive to ensure that foreign currency is available to successful bidders within 14 days from the date of the auction.

Delays in settling accounts of successful bidders within the stipulated 14 days was beginning to unsettle the market.

The Government’s five-year economic blueprint, the National Development Strategy 1 (NDS1), is designed to rebuild the country’s once-vibrant industrial base.

One of its key deliverables is to improve the performance of the manufacturing sector through value addition. NDS1 will also prioritise quick-win value chains such as agro-processing, pharmaceuticals, iron and steel, engineering and plastic waste. — @SikhulekelaniM1

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