adminWalter Mswazie, Masvingo Correspondent
ZIMBABWEAN companies have been urged to minimise external borrowing as this increases country risk and contributes to the prevailing liquidity crunch.
Addressing captains of industry at a hotel in Masvingo last week, Confederation of Zimbabwe Industries (CZI) president Mr Busisa Moyo said the country’s rate of borrowing was a cause for concern.
“The rate at which the country is borrowing is not only appalling but has reached unprecedented levels,” he said.
Mr Moyo called for discipline when borrowing and urged businesses to survive within their means and mobilise resources internally.
In view of liquidity challenges and lack of capital finance, several companies — both the private and public enterprises — are increasingly seeking foreign funding to boost their businesses.
Mr Moyo said Government borrowed about $300 million in 2009 but the figure has increased to about one billion dollars in 2016, a situation he said was not sustainable in the long term.
He also implored the Government to reduce its salary expenditure and focus on stimulating sustainable economic growth through financing productive sectors.
“We are lobbying Government over issues to do with expenditure and how to steer economic growth. The engagements have been positive and as I speak we are scheduled to meet them again soon,” said Mr Moyo.
Treasury has also expressed concern over the huge Government salary bill, estimated at more than 90 percent, which leaves little room for capital expenditure and social services delivery.
The CZI boss called on the Zimbabwe Revenue Authority (Zimra) to exercise restraint when collecting taxes from struggling local companies, which are expected to steer the economy.
Mr Moyo, however, hailed the Government for coming up with measures that promote the local manufacturing industry adding that all developed economies across the globe were supporting local products.
“We hail Government for the introduction of Statutory Instrument (SI) 64, which promotes the local manufacturing industry. Since the introduction of this SI, capacity utilisation of industries has improved. It has happened recently in South Africa where there is now a ban on the importation of chickens as they want to protect the local chicken industry. The US President Donald Trump is also a firm believer in local products and has come up with policies that promote local products ahead of foreign ones,” he said.
— @walterbmswazie2
Online Reporter