Forex situation improves: CZI president

THE manufacturing sector has started benefiting from the US$500 million facility recently secured by Government to stabilise the foreign exchange market, newly elected Confederation of Zimbabwe Industries (CZI) president, Mr Henry Ruzvidzo, said yesterday.

He told Business Chronicle that the seed capital availed by the Reserve Bank of Zimbabwe (RBZ) has brought hope for the productive sector and called upon other exporters to trade their forex earnings on the interbank system to tame inflationary pressures and rejuvenate the economy.

"Yes, industry has begun to access some currency from the interbank market thanks to the seed capital from the RBZ facility. Sadly sales by other foreign currency generators have been very low via the interbank market and this has kept the rates very high and unviable for production," said Mr Ruzvidzo in an e-mailed response.

Stabilising the monetary sector is critical towards transforming the economy and is envisaged to buttress the fiscal reforms that Government is already seized with.  Finance and Economic Development Minister, Professor Mthuli Ncube, has stated that structural reforms introduced under the Transitional Stabilisation Programme (TSP) were key in providing the much-needed breathing space for economic reforms and protecting the economy from failure.

While acknowledging the challenges with inflation, he said fiscal consolidation measures, reinforced with a tight monetary policy stance together with the liberalisation of the exchange rate, were containing previously uncontrolled inflationary pressures.  

"We must continue to tackle the widespread indiscipline in the foreign exchange market, which is still a major source for parallel exchange market premiums feeding into inflation," said Prof Ncube in his weekly column published yesterday.

Mr Ruzvidzo said the new dispensation was making great strides in reviving the industrial sector, which has been in decline in the past years.  He said the revival was due to "significant" investments in the cement, edible oils, powder soap and ceramic tiles industries.

"This is testimony to the importance of a conducive policy environment. I, therefore, have hope that revival of the sector can be rapid if the environment has the right conditions," Mr Ruzvidzo said.

During his term in office, he said, he plans to reposition the manufacturing industry as an important pillar that sits at the centre of the economy and advocate for policies that will create a favourable environment for both local and external investment.  

"I will also push for a public view that sees local production as important for the ultimate development of the country and as an investment in the future for all. My advocacy will focus on fact-based positions and will also emphasise consensus building on issues," Mr Ruzvidzo said.