Cost of doing business drives price hikes – CZI

Sikhulekelani Moyo, Business Reporter
CONFEDERATION of Zimbabwe Industries (CZI) Matabeleland Chamber president, Mr Raymond Shoniwa says the industry is facing a continuous rise in the cost of doing business, which compels businesses to increase prices for finished products.

Speaking during the chamber’s annual general meeting in Bulawayo on Tuesday, he said major cost drivers such as fuel and electricity were a challenge to many operators.

“This, compounded with fluctuating exchange rate pressures, are frustrating smooth business growth and dialogue with authorities is underway in a bid to find common ground.

The cost of doing business continues to be a major challenge not only in this region but the whole country,” said Mr Shoniwa.

He said business was grappling with inflation pressures which are adversely affecting business operations.

“Fuel continues to be an issue as you cannot find local currency fuel anywhere even though the authorities still peg prices in Zimbabwean dollar and United States dollar.

Electricity supply, which was good in the past is now erratic and we have some affected areas like Arenel and other companies,” said Mr Shoniwa

He said his organisation will continue to engage authorities so that industry is exempt from load shedding.

Mr Shoniwa said while the Reserve Bank of Zimbabwe (RBZ)’s forex auction system has brought some relief at some point, there are challenges associated with the platform such as delayed disbursements and reduction in allotments.

“The auction system brought some relief but the delays are now a problem as the period seems to be getting longer by each passing week.

We are hoping that can be addressed in future as that causes pressure on businesses as most depend on importation of raw material,” he said.

Mr Shoniwa said the mainstreaming of the multi-currency framework was commendable but said the move was being complicated by exchange rate pressures as manufacturers end up confused about what rates to be used when billing customers.

“We really need to find ourselves because this issue of price increases needs to be urgently addressed.

“We are not responsible and we want to make it clear that we are also victims of the exchange rate,” he said.

In her remarks, which were presented virtually to the AGM delegates, CZI chief executive officer, Ms Sekai Kuvarika, said the organisation was engaging the authorities and policy makers on issues to do with exchange rates.

“We have maintained that we want a market determined exchange rate, which subjects the pricing of foreign currency to market forces,” she said.–@SikhulekelaniM1