By Justin Mahlahla
Local content promotion body, Buy Zimbabwe, says it welcomes government’s intervention to protect and promote the use of the local currency as we as reduce reliance on imports.
“Buy Zimbabwe takes note of the measures to reduce inflation and stabilize the local currency announced by President Emmerson Mnangagwa on Saturday the 7th of May 2022. While we welcome the intervention by Government we urge for an acceleration of local content measures aimed at reducing reliance on imports and external currencies,” the body said in a statement.
It noted the growth registered by Zimbabwe’s manufacturing sector in the past three years the Second Republic has been power, where capacity utilisation which currently stands at an average of 65 percent, but however, said there is urgent need to ensure that the quantum and local value by key sectors of Zimbabwe is increased by a minimum of 50 percent if the recorded growth is to have meaningful Impact in wealth and job creation.
“As it stands the mining sector which leads in the generation of foreign currency imports more than 70 percent of chemicals, equipment and related raw materials. As such the increase in foreign currency receipts is easily eroded due to high imported content. This is worsened by the decline in the value of the local currency and the passing on of costs to consumers who now feel the local product is expensive.”
Buy Zimbabwe added that unless urgently addressed, the prevailing scenario will reverse the gains recorded in increased shelf space by local goods, hence its calls for Government to urgently put in place measures that include tax breaks, preferences to the auction market and public procurement to companies whose goods and services have a minimum local content ratio of 50 percent.
President Emmerson Mnangagwa on Saturday announced a raft of measures meant to arrest foreign exchange instability and wanton arbitrage on the market as well as indiscipline within the banking sector.
The measures have been widely described as progressive and necessary to reign in various economic players for the benefit of the economy and the public.