HARARE – National Foods Limited, Zimbabwe’s largest food manufacturer, has raised concerns over a severe shortage of foreign currency in the official market, which it says is hampering business operations.
The company’s chairman, Edwin Manikai, highlighted these challenges while announcing NatFoods’ half-year financial results.
Manikai pointed to the scarcity of US dollars on the official market, calling for urgent measures to improve the acceptance of the Zimbabwe Gold (ZWG), also known as the ZiG, within the broader market. He noted that recent monetary reforms introduced the ZiG to broaden Zimbabwe’s multi-currency system.
“The final quarter of the year under review saw currency reform measures instituted by the monetary authorities through the introduction of a new structured currency, the Zimbabwe Gold (ZWG),” said Manikai.
Despite the introduction of the ZiG, the market remains constrained by limited access to local debt facilities and foreign exchange via the Willing Buyer, Willing Seller (WBWS) platform. Manikai stressed that while the addition of the ZiG is a positive step, its success depends on further supportive measures that enable smoother currency interchange. “This will naturally result in greater market acceptance and use of the new local currency,” he added.
The ZiG, which was introduced on April 5, 2024, represents Zimbabwe’s sixth attempt at establishing a stable local currency over the past 15 years. Backed by gold, precious minerals, and foreign currency reserves, the ZiG initially maintained a stable exchange rate of US$1: ZiG 13.86. However, it has recently weakened on the parallel market, prompting the central bank to devalue the currency by 43% in an attempt to stabilize the disparity between official and parallel exchange rates.
Industry groups have identified limited access to foreign currency in the WBWS market as a key driver of these exchange rate pressures. As businesses like NatFoods grapple with these challenges, many are looking to the government for solutions that will stabilize the currency and support economic growth.
