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Sikhulekelani Moyo, Business Reporter
SEVERAL manufacturing companies are expected to close shop this week for the festive season with business leaders commending the Government’s forex auction system for facilitating enhanced access to foreign currency.
Most companies have issued notices indicating that they will be closing this week for the Christmas and New Year holidays and opening early January. The Reserve Bank of Zimbabwe (RBZ) has also hinted on suspending the foreign currency auction operations during the festivities.
The manufacturing sector closes the year on a high note as capacity utilisation has risen to about 66 percent as more domestic producers are reclaiming their market footprint.
The jump in capacity utilisation from an average of 47 percent in 2020 is a milestone for Zimbabwe under the Second Republic’s business friendly policies.
The introduction of the foreign currency auction system, consolidation of monetary policy reforms and fiscal incentives, are some of the interventions that have aided industry recovery despite the disruptive impact of Covid-19 in the last two years.
Zimbabwe National Chamber of Commerce Matabeleland Chapter chairman, Mr Mackenzie Dongo confirmed that many businesses will be closing for the festive holiday.
“The Reserve Bank of Zimbabwe indicated that they had cleared the auction backlog on Friday, which is a positive move and we hope they will just pay off everything including the last auction,” said Mr Dongo.
Some businesses are shutting down from 16 December to 16 January to allow for servicing of plant and machinery.
Most retail outlets and small to medium enterprises will however be open most of days during the holidays.
On Monday the RBZ announced that its last auction for the year was last Tuesday and it will open on 9 January next year.
The willing buyer, willing seller market is however, open throughout the holiday period.
The willing buyer willing seller system came into effect in May this year as one of the measures put by Government to arrest inflation.
The measure has been commended by the business community as it has stabilised the exchange rate through mopping up the excess liquidity, which has created demand for the local currency.
This week the RBZ allotted a grand total of US$15,5 million to the auction system with US$14 million being allotted to the main auction and US$1,5 allocated to small and medium enterprises.
As has been tradition, the bulk of the foreign currency allotted was for procurement of raw material, which received US$7,9 million followed by equipment and machinery that received US$2,4 million. — @SikhulekelaniM1
Online Reporter