News / National
'RBZ has failed in forex allocation'
10 Jul 2018 at 08:16hrs | Views
ZIMBABWE Textile Manufacturers' Association (Zitma) says local banks should handle the foreign currency allocation system as the central bank has failed to allocate forex to the industry and was now facing collapse.
Zitma vice president Freedom Dube told NewsDay recently that the Reserve Bank of Zimbabwe's failure to allocate them forex has left the textile industry teetering on the brink of collapse.
"The sector is heavily weighed down by shortage of foreign currency as we are not on the Reserve Bank of Zimbabwe's priority list. As such, we are struggling to get forex. To make matters worse, the bulk of raw materials is imported.
For instance, 90% of our raw material is being imported and we need quite a lot," Dube said.
"Industry should be dealing with their banks not with the Reserve Bank of Zimbabwe. I believe it was going to be better if the system was being spearheaded by the banks not by the central bank because my bank knows me very well. The issue of centralisation has killed us."
As a result of the liquidity crisis, the central bank came up with a foreign currency priority list to assist some struggling companies so that they access foreign currency speedily.
Yet, despite critical raw materials being listed as priority one, Dube said the industry was facing severe shortages of cotton lint.
As a result, Dube said the industry was operating at subdued capacity owing to foreign currency challenges as well as cheap imports.
"The operating capacity differs from subsector to subsector depending on the forex availability. Some subsectors are operating at 50% while others below," he said.
"We are still facing challenges of smuggling even though the Zimbabwe Revenue Authority (Zimra) is trying. Blankets are still coming in through corruption."
He said they needed to invest in the new technologies to remain competitive and the government should help save the industry from total collapse.
According to Zitma, at least 17 000 jobs in the textile industry have been lost as a result of the economic crisis.
Dube said it used to employ 20 000 people, but currently has just around 3 000 workers
Zitma vice president Freedom Dube told NewsDay recently that the Reserve Bank of Zimbabwe's failure to allocate them forex has left the textile industry teetering on the brink of collapse.
"The sector is heavily weighed down by shortage of foreign currency as we are not on the Reserve Bank of Zimbabwe's priority list. As such, we are struggling to get forex. To make matters worse, the bulk of raw materials is imported.
For instance, 90% of our raw material is being imported and we need quite a lot," Dube said.
"Industry should be dealing with their banks not with the Reserve Bank of Zimbabwe. I believe it was going to be better if the system was being spearheaded by the banks not by the central bank because my bank knows me very well. The issue of centralisation has killed us."
As a result of the liquidity crisis, the central bank came up with a foreign currency priority list to assist some struggling companies so that they access foreign currency speedily.
As a result, Dube said the industry was operating at subdued capacity owing to foreign currency challenges as well as cheap imports.
"The operating capacity differs from subsector to subsector depending on the forex availability. Some subsectors are operating at 50% while others below," he said.
"We are still facing challenges of smuggling even though the Zimbabwe Revenue Authority (Zimra) is trying. Blankets are still coming in through corruption."
He said they needed to invest in the new technologies to remain competitive and the government should help save the industry from total collapse.
According to Zitma, at least 17 000 jobs in the textile industry have been lost as a result of the economic crisis.
Dube said it used to employ 20 000 people, but currently has just around 3 000 workers
Source - newsday
