The Sunday Mail
Munyaradzi Mlambo
LOCAL manufacturers are presently having difficulties accessing foreign currency to import raw materials due to depleting nostro balances, thus hampering the full realisation of benefits accruing from Statutory Instrument (SI) 64 of 2016.
A nostro account is a foreign currency-denominated account that is usually held offshore by another bank on behalf of a local financial institution.
Due to a mismatch between disproportionately large imports and dwindling exports, foreign currency reserves have naturally been declining.
Last week, chief executive officer of oil expresser Surface Wilmer Mr Sylvester Mangani said although SI 64 has given short-term assurance to the local industry, including time to retool and invest, the shortage of raw materials is presenting significant challenges to manufacturers.
“Most of the much needed foreign currency is presntly going into funding of maize imports which is something that can be produced locally for exports.
“The same applies to soya bean crude oil and soya meal. The country needs to be competitive in agricultural productivity to support downstream processing industries like ourselves with price-competitive inputs,” said Mr Mungani.
Recent statistics from the Zimbabwe National Statistics Agency (Zimstat) show that imports increased by 13 percent to $444 million in August 2016 despite Government’s July policy intervention to restrict imports.
The SI effectively restricts imports of several goods such as dairy juice blends, milk, canned fruits and potato crisps, baked beans, bottled water, mayonnaise, salad cream, peanut butter and canned food.
Mungani said Government needs to focus much of its resources on agriculture.
Added Mr Mugani: “While support to local farmers in the form of inputs and contract farming is noble and welcome, the Government should support corporates that want to venture directly into farming so as to stimulate large-scale farming.”
Reserve Bank of Zimbabwe Governor Dr John Mangudya announced on September 15, 2016 that the central bank will mobilise more than $545 million in nostro stabilisation facilities to deal with current delays in the processing of outgoing payments by banks.
RBZ has so far secured $215 million and the balance is expected to come by end of October.
Surface Wilmar is one of the largest cooking oil manufacturers in the country having invested over US$20 million in capital projects and an almost equal amount in working capital.
Recently, the company improved packaging for its flagship brand Pure Drop.
