Retailers group credits RBZ forex auction for 60 % local goods

CONFEDERATION of Zimbabwe Retailers (CZR) has credited the Foreign Currency Exchange Auction introduced by the Reserve Bank of Zimbabwe (RBZ) for prompting a 60 % surge in locally manufactured goods on supermarket shelves.

A raft of economic reforms introduced by Treasury 2019 ignited a volatile inflation period which saw prices of basic commodities spiral beyond the reach of many.

Due to the unpredictability of the economy and a government directive for businesses to trade in local currency, most manufacturers downscaled production, leaving retailers with no choice but to rely on imported goods.

But speaking Thursday during an exclusive interview on NewZimTV’s Economic Insights programme, CZR president Denford Mutashu acknowledged the impact of the foreign exchange auction system for boosting locally manufactured goods.

“Currently, the shelves constitute 60 % locally manufactured goods and 40 % imported. However, as borders open, we may see increased importation of goods both formally and informally, but we are happy with the trajectory,” he said.

The retailers group said there has been increased uptake of locally manufactured goods by retailers and wholesalers, something set to go a long way towards saving the country of hard-earned foreign currency.

“This is the reason why we are participating in the localisation of the content policy so that it buttresses the drive towards industrial revival and develops a robust export strategy,” Mutashu said.

The remarks come at a time when the Zimbabwe National Statistics Agency (ZIMSTAT) reported a trade deficit of US$549,38 million for the nine months to September 2020.

In economics, trade deficits occur when a nation’s imports exceed exports, and this can be an indicator of specific productivity related economic problems.

The statistics agency also said imports in the month of September rose to US$3.49 billion as economic activity picked up against US$2.94 billion exports.

However, the trade deficit narrowed to 26 % from US$745.2 million reported in a similar period last year. – Newzim

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