Companies are optimistic about new policies

The Sunday Mail

Olivier Kazunga

Business leaders are confident that the macroeconomic stability achieved through a series of recent policy interventions will be sustained over the medium to long term.

In recent months, the government has announced a cocktail of fiscal and monetary measures to control the depreciation of the local currency and the resurgence of inflation.

The policies aimed to curb speculative behavior and arbitrage.

Interventions include the introduction of gold coins to preserve their value, as well as the directive for all government ministries, departments, agencies and local authorities to collect fees and levies in local currency, except in specified cases.

In talks on the sidelines of the Confederation of Zimbabwe Industries (CZI) Annual Congress which has just ended in Harare, captains of industry expressed their confidence in the continued stability of the exchange rate.

“Clearly, the most critical catalyst for any type of business and, therefore, economic growth will be macro-economic stability. We warmly welcome the recent stability in the macro-economic exchange rate environment. C This is a very welcome development,” said Schweppes Zimbabwe Managing Director, Mr. Charles Msipa.

“It’s a critical enabler for us to plan for the recovery and growth of our business – absolutely essential.”

However, he noted the need for a more comprehensive exchange rate management system.

“At present, many companies in the manufacturing sector still do not generate or obtain sufficient foreign exchange for their imports of raw materials.

“I think we can consolidate this stability by making it more sustainable and having a solid exchange rate management system in the future,” he said.

Shepco Industries Group Chief Executive Dr Shepherd Chawira said: “The government appears to have measures in place which will curb inflation.

“The 200% increase in interest rates will discourage lending for speculative purposes, the gold coins have taken away excess liquidity and the control that the government has over entrepreneurs in terms of payments and management of the entire government contractor value chain has really brought these positive steps,” he said.

“We are happy that the convergence gap is narrowing between the parallel market and the official interbank exchange rate, which is something very positive that has brought some stability in terms of inflation.”

Economist Ms Wendy Mpofu said the current stability is sustainable as long as the government continues to monitor how the market reacts to interventions.

“I think the current economic situation in terms of a stable environment is sustainable in the future.

“What is essential is that policymakers continue to monitor the market reaction and possibly fill in gaps that could be the way to reverse the gains achieved so far through government interventions,” said she declared.

Meanwhile, the Minister of Finance and Economic Development, Professor Mthuli Ncube, who was the guest of honor at the CZI annual congress which ended on Friday, officially launched a $200 million facility for raw materials and equipment.

The facility was organized by CZI in partnership with Loita Capital.

CZI Chairman Mr. Kurai Matsheza said they had been talking with Loita Capital for some time before reaching the latest deal.

“They have not only spoken to us but also to the Reserve Bank, seeking authority over how it (the facility) is structured here through the official foreign exchange authorities,” he said. declared.

President and CEO of Loita Capital, Mr. Justin Chinyata said, “The reason we are here is that we have our trading platform, and part of this trading platform concept is that we are there. We have also integrated a financial model which will help importers and exporters. (from Zimbabwe) in their funding needs. And the initial target is $200 million which will be split between trade and investment,” he said.

“Most of the people we’ve worked with tend to be very professional, especially in the export business,” he said.

In his address, Professor Ncube reaffirmed the government’s commitment to supporting the industry.

Capacity utilization increased to 57% last year from 47% in 2020.

“We are seeing an increase in domestically produced products. . . and we as government are committed to supporting the value chain,” said Minister Ncube.

The country’s economy is considered healthy.

Zimbabwe recorded a current account surplus of $340.5 million in the first half of this year, compared to $97.2 million in the corresponding period of 2021.

This, Prof Ncube said, is likely to support the value of the local currency.

“Currency risk is other factors but not this one, so the surplus continues to be driven by strong inflows in terms of diaspora inflows, as well as some export growth” , he added.

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