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Oliver Kazunga, Senior Business Reporter
SMALL-to-medium scale enterprises in Bulawayo have turned to selling imported goods as they are no longer able to manufacture locally due to the rising cost of production driven by inflationary pressures in the economy.
In an interview yesterday, Bulawayo Chamber of Small-to-Medium Enterprises chairperson Mr Energy Majazi said some of their members who were into the production of engineering and equipment and furniture business have abandoned manufacturing the items.
“We are hard hit. Firstly, it’s the issue of electricity supply which at present is not reliable and secondly, we are battling the ever-increasing costs of raw materials, we are unable to manufacture because we don’t know how much our finished products will cost.
“Suppose a customer wants to buy a wardrobe, if I give a quotation of ZWL$800 when you come tomorrow morning with that ZWL$800, I will tell you that its now ZWL$1 500 because of the unpredictable inflationary pressures,” he said.
The Government recognises the critical role played by the Small-to-Medium Enterprises (SMEs) sector in economic development and resolved to bring them on board to participate in the country’s economy by formalising their operations.
According to the 2012 Finscope Micro, Small and Medium Enterprises (SMEs) Survey, there are 2,8 million SME owners employing 2,9 million people, translating into 5,7 million people dependent on the sector, contributing more than 60 percent to the Gross Domestic Product (GDP).
Following the SMEs formalisation programme, which the Zimbabwe Revenue Authority embarked on in 2017, the number of registered players in the sector across the country rose to 18 500 from 13 000.
Mr Majazi said as a result of the prevailing economic climate SMEs’ contribution to the country’s GDP was being strained.
He said further to inflationary pressures, SMEs in Bulawayo were finding it hard to access foreign currency to import their wares from neighbouring countries such as South Africa and Botswana, among other countries.
“Due to the challenges that we are grappling with, some of our members who were previously manufacturing furniture and engineering equipment have since stopped manufacturing and are selling imported food items.
“Where they are selling for example, furniture items like wardrobes among other household equipment, the cheap items would have been imported from countries like South Africa,” he said.
Business Chronicle has observed that there has been an upsurge in the number of vendors in the Central Business District selling an assortment of items including groceries, fruit and vegetables as well as clothing items.
The vendors have been playing cat-and-mouse game with the Bulawayo Muncipal Police with some traders resorting to selling their wares after hours to avoid prosecution.
Meanwhile, Finance and Economic Development Minister Professor Mthuli Ncube says foreign exchange market rates and inflationary pressures are expected to ease as Government continues implementing macro-fiscal stabilisation measures that will see the economy rebounding beginning next year.
In the latest reforms progress report for the month of October released this week, he said the rebounding of the economy would be hastened by the ongoing reforms as outlined in the Transitional Stabilisation Programme (TSP).
Implementation of the reforms outlined in the TSP was on course with notable milestones on fiscal consolidation, monetary policy restoration, liberalisation of the foreign exchange market, structural and governance reforms, re-engagement, investment promotion and support for the productive sectors. — @okazunga
Online Reporter