Chronicle Editor
Nelson Gahadza/ Francis Gakanje, Harare Bureau
THE Confederation of Zimbabwe (CZI) says there is a need for continuous engagement between the Government and private sector to find common ground in addressing exchange rate challenges facing the economy.
CZI president Mr Mucha Mkanganwi said this at a CZI-organised fast-moving consumer goods (FMCG) manufacturing and retail sector engagement yesterday.
The meeting was aimed at discussing issues affecting the manufacturing, retail and wholesale value chain and finding ways to collectively address teething issues.
“The key recommendation from members is to float the exchange rate, which is the main source of problems across the value chain.
“What we are saying is that things are urgent. We have to put a lot more emphasis on dialogue, and this is on a daily basis at the moment,” he said.
He added that there is an urgent need to find an effective solution to the challenges facing the economy.
Manufacturers say 80 percent of their raw material is sourced in US dollars, while only 20 percent is in local currency hence it becomes difficult to supply formal retailers and wholesalers exclusively in local currency.
Mr Mkanganwi said at the engagement, the members agreed that they had faced similar problems, which manifested differently across the sectors.
“So, we are friends; what we need to do is engage the authorities to give us a policy that makes the trading platform fair for everyone.”
He said there was strain related to the issue of the exchange rate.
“In that regard, we do not want anyone to close their business, whether it’s retail, manufacturers, or wholesalers,” he said.
Mr Archie Dongo, a board member of the Confederation of Zimbabwe Retailers (CZR) and N Richards Group director said the value chain had common challenges hence it made sense to come together and understand the challenges.
“When we come together we create a platform from which we can try to address those common challenges together. The common problem facing all the members of the association is the issue of exchange rate,” he said.
Mr Dongo said business member organisations (BMOs) were engaging the Government to come up with solutions that work for both the Government and private sector in terms of the exchange rate.
He said challenges were prevalent across the value chain but manifested clearly at the retail end, which is the consumer-facing end of the chain.
“At the end of the day, retail and wholesalers are the face of the value chain, so that is where there is a problem in the value chain.
“However, that doesn’t necessarily mean the problem emanated from there; we have to go up the value chain and try to find out where the problem started and try to identify exactly that problem,” said Mr Dongo.
He noted that the biggest challenge was the supply of foreign currency.
“In the banking sector, which is an input into manufacturing, retail, and wholesale, we believe we need to focus on that challenge that is straining forex supply so that we can then improve that supply.
In the consumer-facing retail and wholesale, that will be fixed automatically,” he said.
Mr Dongo said in the short term, it was now about business survival for the manufacturer, retailer and wholesaler sectors.
“Government also has to survive, and we need to continue dialogue until we come up to an agreed position,” he said.
Retailers Association of Zimbabwe chairperson Ms Peggy Rambanepasi said no retailer wanted to price itself out of business because not only are the traders competing among themselves as formal retailers, but they also have to contend with informal retailers.
“But the reality of it is that we are losing ground, and I think this has been happening since the beginning of the year, and we are feeling the pressure.
“We have had fines, but we have also had situations where you get suppliers who say, I just want the exclusive US dollars from you. Then if I price in USD and get fined, the manufacturer does not want to take the risk,” she said.
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