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Manufacturers Struggle To Access Foreign Currency - CZI

7 months agoTue, 13 Aug 2024 09:18:34 GMT

Manufacturers Struggle To Access Foreign Currency - CZI

The Confederation of Zimbabwe Industry (CZI) says manufacturers are struggling to obtain foreign currency from the Willing Buyer Willing Seller (WBWS) platform needed to import critical raw materials.

CZI CEO, Sekai Kuvarika said that while there has been a bit of stability in the market, businesses are finding it difficult to get foreign currency. Said Kuvarika (via Business Times):

This is a serious issue. The manufacturers are failing to access forex for their businesses and we are still engaging the monetary authorities over the issue.

We believe that we have a bit of stability in the market but we have some serious issues on failing to access forex.
The challenge is that companies are not accessing the forex they require for the importation of raw materials.
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As you know the manufacturing sector in Zimbabwe is highly import-dependent, over 70% in most of the cases.

Kuvarika added that the CZI, which is the country’s biggest business lobby group, has engaged the Reserve Bank of Zimbabwe governor, John Mushayavanhu over the matter. Said Kuvarika:

We have met the governor to discuss the piling of ZiG due to limited access to foreign currency to bring raw materials.
From our conversations, the RBZ seems to be taking the law of averages into play where he argued that manufacturers may have significant US$ local sales therefore their forex requirement may not be very high.

Rufaro Zengeni, an economic analyst, said the WBWS platform needs to be liberalised. Said Zengeni:

We have these contradictions where people are not allowed to bid higher if the RBZ has fixed the exchange rate; there would not be this shortage.
There is a shortage of forex and the prices have not moved in the past three months, something is wrong with those propositions as they don’t reconcile.
We still have a price discovery mechanism problem in the economy.

Economist Prosper Chitambara said that the shortage of forex on the official market fuels ZiG devaluation and inflation. He said:

It seems that there are no willing sellers of foreign exchange to meet the high number of willing buyers.
This means a lot of businesses are having to seek recourse to the parallel market to get foreign exchange and this explains the depreciation of the ZiG due to the strong demand for the US$ which is not matched by the supply on the official market.
This is basically the mismatch between the forex and available supply on the formal market.

Another economist, Gift Mugano said some businesses are managing to get only a fraction of their forex requirements. Said Mugano:

Business executives told me that they are failing to access forex from banks with some securing only 5-10% of their forex requirement notwithstanding the assurances given by the RBZ.
Due to the high demand of US$, exchange rates have started running away to the range of between ZiG22.30/US$1 and ZiG24/US$1.

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20 Comments

Violence☠️ · 7 months ago

Yah ma1

Anonymous · 7 months ago

I thought the Zig economy was said to be working wonderfully? Didn't the IMF also and World Bank throw their weight on the Zig idea? Why should there be structural issues again? Ko iye anonzi Weakness Chivharo ndiyani arikutaurwa muma text book eEconomics?

Peter Bvirakare · 7 months ago

The country has a lot of foreign currency ie USA dollars. Banks are not holding on to this money.Very few people are in formal employment and are paid through banks.the majority of the people are now self employed.mainly vendors and small bussines people. All these people do not.do business through banks they keep their money at homes. The USA dollar is awash in the informal sector. Until such time wen people have confidence in banks.then the situation will improve. Hapana munhu achada kuisa mari yake mu Bank coz of what happened before.

theLastAntKing · 7 months ago

As it is, even though we're not economists but it is plain simple that the introduction of zig was premature. Zimbabwe needs a decade or more before they talk of a currency. Industry is dead! So as long as we're not exporting then forget about a stable currency Sungai chaizvo ma forex dealers but soon muchavatsvaga Industry is not going to wait for official channels to get forex. Rbz said by 2026 zig will be in full swing, so this means individuals and cooperates have started holding every USDs they have. zim economy haidi ma economists but just good policies chete

paris24 · 7 months ago

let them embrace our strategic structured currency

mwalimu · 7 months ago

exchange rate dzekunyepa ana mugano

@Spicyman · 7 months ago

these pple are **** wat they were trying to say as they say that "It seems that there are no willing sellers of foreign exchange to meet the high number of willing buyers" in Zim we all know that our exchange rate is fixed so it iz RBZ's role to meet the demand needed by those buyer handi varikudzingirra mamoney changers mustreet apa cash inenge iripo

Ediots · 7 months ago

I have seen CZI being regarded the brainchild of the ZIG. let them embrace it and not cry. isu we run with the dollar. real money.USD. Whose USD do they want.

freedom · 7 months ago

hapana chinogonekwa ne zanupf'

Anonymous · 7 months ago

ZanuPf continues to win elections, forming government and tongi-ing Zimbabwe. The economy is growing. Tongi-ing continua! Continua!

int · 7 months ago

zig devaluation begins, hamster wheel of failure monetary policies delaying after sometime they introduce to u new currency whilist pasina kwatiri kuenda neteam ir

Chibaba · 7 months ago

Zig haisi mari it's a tissue paper so it must be removed in circulation and the US should become the only legal tender.

Corruptmore Looto · 7 months ago

Command Economics don't work. You can't rig the economy, what you put in is what you get, so if you put in sh!t policies the economy spits right back at you those sh!tty policies

Patz · 7 months ago

Mary Mubaiwa is a good example of how the wives of the elite empty forex from the RBZ. During her time as Chiwengas wife aingotora ma million ondospender ku S.A on luxury pretending to fund a project. Its obvious all elites wives ndozvavanoita. Plus mapolitical elites take ****s from tax payers money which is never paid back. In fraudulent contracts by Chivhayo he defrauds 200 per cent of the money kuita ku empter gvt coffers. How can manufacturers fail to acquire forex from banks? It means the banks prefer to keep their forex than to exchange it for ZiG

Patz · 7 months ago

Ko vanaChivhayo varikuiwana sei

Chibaba · 7 months ago

Chivhayo ndiye zvee muridzi veZimbabwe akachibata chimuti kuti dzviiiiiiiiiiiiiiii

44yrs · 7 months ago

Haaa izvo zvagara zviriko and ndiko kufa kuri kuita industry changosara muindustry umu iscrap chete ndiyo iri kurira