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Bata calls on RBZ to hike incentive

by Staff reporter
13 Feb 2018 at 05:32hrs | Views
ZIMBABWE's largest shoe manufacturer, Bata Shoe Company, has called on the Reserve Bank of Zimbabwe (RBZ) to increase the export incentive to 15 percent to boost exports by local companies.

The Central Bank last year announced that it had increased export incentives from 5 percent to 12 percent for top exporters as part of efforts to boost foreign exchange generation.

The export incentive scheme was introduced in 2016 by the RBZ under a $200 million bond notes facility guaranteed by AfreximBank while another scheme amounting to $300 million was also availed.

In his 2018 monetary policy statement last week, RBZ Governor Dr John Mangudya said the export incentive scheme has enhanced competitiveness of Zimbabwe's exports and this has significantly contributed to the growth of exports which grew by 36 percent from $2.8 billion in 2016 to $3.8 billion in 2017.

Bata has been one of the companies which took advantage of the export incentive facility and has captured a significant market in the region which includes Zambia, Malawi and Botswana among others.

The company's managing director, Mr Ehsan Zaman, said the high cost of production inherent in the economy has compromised the competitiveness of local companies hence there was a need for the review of the export incentive upwards.

"We see greater opportunity in increasing the export business if we can be a bit competitive.

"We are working with the concerned authorities to get a better incentive may be up to 15 percent so that we can offer competitive prices because the cost of production here is very high.

"This ultimately affects our competitiveness against similar products from the region," he said.

Mr Zaman also appealed to Government for a speedy allocation of foreign currency to allow uninterrupted importation of critical raw materials.

He said his organisation might be forced to suspend some of its product lines should delays in forex allocation persist.

At its peak before the turn of the millennium, the company employed 5 000 people but at the height of hyperinflation, the figure drastically went down to under 500.

However, due to the improved economic climate in the country, the shoe manufacturing company has now improved on capacity utilisation levels operating at 90 percent and employing 1 200 people.

Source - chronicle