Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu has called on industrialists to get out of their “comfort zone”, and explore avenues of boosting foreign currency generation to overcome the now perennial crippling shortages of forex which occurs in the fourth quarter of each year.
Minister Ndlovu said the huge appetite by manufacturers to access foreign currency for their operations can only be satiated by deliberate efforts to engage in export-oriented businesses.
The minister said this on Monday during a meeting with business member organisations (BMOs) and Industrial Development Corporation of Zimbabwe officials in Harare.
“. . . the perennial challenge of forex shortages during the fourth quarter of each year has to be dealt with decisively and requires proper planning and collective effort,” said Minister Ndlovu.
“While on the foreign currency situation, my view is that our forex generation is by no means insufficient; it is our forex needs (utilisation) that are excessive and we need to move out of the comfort zone we have found ourselves in and take decisive steps to stop this bleeding.”
Minister Ndlovu’s remarks come at a time when the country has confronted fierce forex shortages from September to December both last year and in 2017.
The economy only starts to exit the forex rut when the tobacco selling season opens.
In both instances, prices of basic goods especially cooking oil and sugar, have risen exponentially while their production receded as producers either didn’t have foreign currency or feared that they would sell at a loss.
The country has largely depended on mining, particularly gold, and tobacco growing, for foreign currency generation.
This has put pressure on Government’s ability to equitably distribute to various sectors of the economy.
Analysts have suggested that industrialists could play a significant role in generating foreign currency if they put their act together, instead of taking begging bowls to the Reserve Bank of Zimbabwe to access foreign currency to purchase raw materials, spares and production equipment.
There have been suggestions that bread makers should engage in contract farming for wheat while cooking oil makers also contract farmers in the growing of cotton, soya-bean and sunflowers, which would in turn be used in expressing cooking oil.
Government is now seeking lines of credit to support the manufacturing sector so that they can participate in the export market and generate foreign currency.
Meanwhile, Minister Ndlovu said the first quarter of 2019 has not been rosy as it was “fraught with unfortunate calamities” such as the disturbances of January 14 to 16 which saw industrialists loosing production time as opposition and NGO-sponsored hooligans went on a rampage, looting shops, torching property and blocking employees from reporting to work.
Some firms that were looted are yet to recover and Government is working on a special package to breathe life into such businesses.
Further, erratic rains in most parts of the country have all but caused a drought.
Recently, some businesses in Manicaland and Masvingo were affected by Cyclone Idai, which has so far claimed 268 lives and turned the landscape upside down.
Minister Ndlovu called on industrialists to “regroup, take stock of all the damage and losses as a result of these events and then move ahead with more determination and vigour”.