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Nyaradzo Bakari, Business Reporter
AUDITING firm, Deloitte and Touche, says local firms should trim imports and embrace competitive export strategies to impact positively on the economy.
Urgent attention has to be directed towards retooling so as to drive volumes and improve product quality with a bias towards exporting, senior partner in charge of the Bulawayo office, Mr Tapiwa Chizana, said.
In an interview on Friday on the sidelines of a clean-up exercise conducted by Deloitte and Touche at Mpilo Central Hospital, Mr Chizana said a majority of companies in Bulawayo and across the country were still using old equipment, making it difficult for them to compete with their peers in the international community. “The challenge that most of our companies face is the use of old equipment. A lot of companies use old equipment that is more than 10 years old. So, they need to retool to be more competitive in this global environment,” he said.
Zimbabwe has not been doing well on the export arena in the past years, a trend blamed on a number loopholes that include low production, high costs of production, lack of capital and a combination of loss of markets within the context of sanctions that were imposed on the country at the turn of the millennium.
Official statistics indicate that the trade deficit worsened since adoption of the multiple currency system in 2009 as local products became costly based on use of the Unites States dollar, compared to weak regional currencies. The trend has been blamed for the influx of cheap imports as Zimbabwe became a haven for foreign currency.
“Where there is competition from countries like China you can’t use equipment that is old. You need equipment that is effective and efficient for good production. Foreign currency is also one of the biggest challenges,” said Mr Chizana. He noted that the shortage of foreign currency was a symptom of weak exports as companies struggle to procure key raw materials and meet market demands. Mr Chizana urged the corporate world to minimise imports.
To him increasing exports is one solution to keeping a company flourishing.
“We can only be competitive if we export much more than we import,” he said, adding that competitive exports were possible in an environment where local cost structures are low. If you are selling something outside the country you are competing with a lot of countries. When their cost structures are lower than ours then we can’t compete with them,” said Mr Chizana.
As such, he said, collective efforts were needed to review cost drivers such as utility costs, labour, fuel and taxes. Mr Chizana said all these elements make up the cost of a product and were reflected on the shelves at the level of an ordinary consumer.
He stressed the need for firms to uphold good corporate governance principles saying this was critical in attracting investment.
“Our companies need to gear up to be good candidates for these investments. This can be done by having good corporate governance structures, audited financial statements and complying with the country’s laws, especially on tax,” said Mr Chizana.
Meanwhile, Deloitte and Touche said its clean-up exercise was a way of serving and adding value to the community. Mpilo Hospital’s acting public relations officer, Mr Ozious Ndlovu, expressed gratitude to the company for the positive gesture.
@NyarieBakie
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