Home Buyzim 24 Buy Zim Welcomes Currency Stabilisation Measures

Buy Zim Welcomes Currency Stabilisation Measures

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Illegal money changers pose while exchanging a new Zimbabwe bond note (L) and U.S. dollar notes in the capital Harare, Zimbabwe, November 28, 2016. REUTERS/Philimon Bulawayo

Buy Zimbabwe has welcomed the currency stabilisation measures announced by President Emmerson Mnangagwa on Saturday last week , Great Dyke News 24 reports.

According to the Buy Zimbabwe General Manager Alois Burutsa, the government should push for acceleration of local content measures aimed at reducing reliance on imports and external currencies.

“Over the past three years, Zimbabwe’s manufacturing sector has recorded impressive growth in capacity utilisation which currently stands at an average of 65 percent. However, for this growth to have a meaningful impact in wealth and job creation, there is an urgent need to ensure that the quantum and local value by key sectors of Zimbabwe is increased by a minimum of 50 percent.

 “As it stands the mining sector which leads in the generation of foreign currency imports more than 70 percent of chemicals, equipment, and related raw materials. As such the increase in foreign currency receipts is easily eroded due to high imported content.

“This is worsened by the decline in the value of the local currency and the passing on of costs to consumers who now feel the local product is expensive. Unless urgently addressed the prevailing scenario will reverse the gains recorded in increased shelf space by local goods,” said Burutsa.

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He added that local companies and Buy Zimbabwe stand ready to work with Government to support the sustainable growth of the local economy.

“As part of the measures to grow the economy, create and save jobs, Buy Zimbabwe calls upon the Government to urgently put in place measures that include tax breaks, preferences to the auction market, and public procurement to companies whose goods and services have a minimum local content ratio of 50 percent,” he said.

The measures come in the wake of the deterioration of the parallel market exchange rates to reach a high of US$1: $400 in a development which monetary authorities have blamed on sabotage, speculative borrowing, and indiscipline.

The interventions come after investigations revealed that many companies are simply borrowing large amounts of the local currency which they later channel into the parallel market to purchase the USD which they later dispose of when exchange rates depreciate while in the process helping to put pressure on the Zimbabwean dollar.

Under the new arrangement retailers and wholesalers were allowed to benchmark their pricing to average interbank rate with a maximum allowable variance of 10%. Banks have been slapped with a freeze on lending activities while foreign currency cash withdrawals will attact a 2 percent levy. Third party payment on foreign payments have also been stopped.

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