Regional currencies depreciation exposes local industries

Regional currencies depreciation exposes local industries Anthony Mandiwanza
Mr Anthony Mandiwanza

Mr Anthony Mandiwanza

Business Reporter
ZIMBABWE’S manufacturers say the continued depreciation of regional currencies is worrying as it further exposes local industries to the threat of cheap imports. Dairibord Holdings chief executive officer Mr Anthony Mandiwanza said the loss of value of the South African rand and the Zambian kwacha against major currencies, particularly the United States Dollar, makes local producers uncompetitive.

Zimbabwe’s use of the US dollar pushes up operating costs which feed into the pricing structures of goods produced locally. This makes products manufactured in the region cheaper and makes Zimbabwe the destination for producers from neighbouring countries. Mr Mandiwanza was addressing the business community at the launch of the Confederation of Zimbabwe Industries Quarterly Business Confidence Survey yesterday.

“The depreciation of the South African rand and the Zambian kwacha is worrying. Zambian producers will continue to bring their products into the country and convert the USD back to kwacha at a profit. This makes local products more expensive. “The depreciation of the South African rand versus our economy here; its inescapable that as long as the rand is slipping its causing nightmare business people in Zimbabwe. You are not sleeping, I am not sleeping. Because then suddenly imports are coming from South Africa landing on our shelves at prices much lower than we can dare compete,” said Mr Mandiwanza.

“The depreciation of the kwacha which is now trading at over K7:US$1 simply means that for the Zambian producer, it is attractive to export into Zimbabwe, get the US$ and convert backwards and you recover your margins,” he said. Mr Mandiwanza said the developments in the region are undermining ZimAsset; the country’s ability to value add. He said positive sentiment from Government and the private sector will also help create a positive image about Zimbabwe.

One of the areas where consistency is required, according to Mr Mandiwanza, is the indigenisation policy and on the debt overhang. He cited an incident where two Government officials appeared to have contradicted each other on the issue.

“We need to talk about solutions around the debt resolution strategy rather contradicting each other like we have seen recently two weeks ago when two ministers openly contradicted each other on the debt overhang. As business we must talk. Those contradictions must be minimised,” said Mr Mandiwanza.

“Another point is to do with the issues around indigenisation; the comments that appear to be contradicting inside Government do not help us as business people when we go out to talk to foreign investors,” he said. Addressing the same meeting Industry and Commerce Minister Mike Bimha said Government is seized with improving the Doing Business Environment.

In that regard, Government is vetting potential board members for the National Competitiveness Commission. “We are in the process of putting together a board for this commission and the majority of its membership comes from the private sector. I would like to believe that in a week or two we should be able to announce the members of the board of this commission,” said Minister Bimha.

The coming on board of the competitiveness commission is expected to enhance Government’s efforts to improve the business environment and position local producers to compete.

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