Zimpapers Logo

Munyaradzi Musiiwa Midlands Correspondent
GOVERNMENT is set to increase the export incentive after manufacturers and exporters approached Exchange Control seeking the upward review of the incentive which is at five percent.

Manufacturers and exporters approached Export Control to increase the export incentive to enable them to increase production and exports, thereby generating foreign currency.

The manufacturers’ request comes at a time when the country is grappling with acute shortages of foreign currency which has inhibited production in various sectors of the economy.

Exchange Control, through the Reserve Bank of Zimbabwe (RBZ), has swiftly responded to the requests and invited manufacturers and exporters to make submissions.

“Given the need to increase production and exports, Exchange Control is receiving a number of requests from companies that are requesting for an export incentive of more than 5 percent,” said Exchange Control in a statement.

“Most companies are of the view that an export incentive in excess of 5 percent will make their products competitive on the export market and will also enhance capacity utilisation. To this end, there is need for Exchange Control to do a thorough analysis of the submissions from the companies with a view of ensuring that the objective of increasing production and exports is attained.”

The manufacturers argued that an increase in the export incentive will enable their products to be competitive.

Exchange Control has since asked the manufacturers and exporters to submit their application for export incentives through their bankers to enable Treasury to monitor the cash flows of the companies.

“In order for an informed decision to be made on requests for consideration of export incentive in excess of five percent, applicants through their bankers should provide information concerning a lot of things,” said Exchange Control.

“These include a motivational submission from the company, clearly outlining the objectives and strategies for the company, including the impact of the requested export incentive on value chains. Latest audited financial statements or management accounts to ascertain the financial performance of the company. Cash flow projections assimilating different levels of the export incentive, including the five percent export incentive, current production levels of the company and associated production costs.”

Some of the requirements include levels of imports being included in production and levels of locally sourced raw materials being put into production, current export markets supported by statistics, where available, potential export markets for companies desiring to venture into the export market, current external competitors and the prices of the products being offered on the regional or international markets and indicative timelines when the company is in need of an export incentive in excess of five percent.