The ManicaPost
The Confederation of Zimbabwe Industries (CZI) said yesterday Zimbabwe’s foreign currency crisis that has resulted in business failing to make external payments on time was not “hopeless” and can be resolved if Government and private sector work together.
Zimbabwe is facing severe foreign currency shortages in part caused by low exports and the country’s penchant for imports which has widened the trade deficit.
This has resulted in the Reserve Bank coming up with a priority list for foreign payments which has seen companies struggling to pay their foreign suppliers of raw materials and other inputs on time.
CZI president Busisa Moyo told journalists that addressing the cost of doing business must be the focus this year to improve the country’s competitiveness.
“We would not rate the situation as hopeless but as challenging. The current situation is adverse on business but it presents an opportunity for us to work together to emerge from the current liquidity crisis,” Mr Moyo said.
“The major challenge is the cost of producing which is 45 percent to 50 percent higher than regional peers. In order to export we will need to be cost competitive.”
He said Government must address taxes, charges, levies among other things to improve the economy’s competitiveness. Zimbabwe’s annual trade deficit averages $3 billion but Government is optimistic the figure might decline with new measures that were introduced to limit imports.
Mr Moyo said cost reduction, which local businesses have been pushing for, was one of the means through which competitiveness of the economy can be addressed.
“We are optimistic that a solution can be found, it’s not a mystery,” the industrialist said. “If we have a cost competitive environment and we are able to generate the exports. Between Government and the private sector we have the tools and means if we work together and can achieve consensus.”
Mr Moyo said the coming of the tobacco selling season, a major foreign currency earner, would in the meantime help ease the foreign currency crisis, stressing it was however critical to find a long term solution.
Zimbabwe’s manufacturing industry has for the past three years operated below 50 percent of its capacity due to a number of bottlenecks. This has not only impacted on productivity but also on exports and employment as well.
Meanwhile, the CZI will host a 2017 economic outlook dialogue at the end of this month. — New Ziana.
