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Business Reporter
THE local manufacturing sector says there has been a decline in raw materials sourced locally as companies continue to grapple foreign currency challenges increasing the industry’s over-reliance on imports.
According to the Confederation of Zimbabwe Industries (CZI) 64 percent of raw materials were procured locally this year, which is 20 percent below the amount of local raw materials procured last year.
“The decline in raw materials sourced locally points to the pressure on foreign currency requirement and the need to shift to local raw materials where possible,” said CZI.
The industry apex body said neighbouring South Africa was the main source of raw material imports accounting for 53 percent of the imports while China is the second biggest exporters of raw materials to Zimbabwe. This, CZI said, affirms South Africa as the country’s biggest trade partner.
However, there have been challenges procuring raw materials due to import licence challenges as well as foreign currency shortages. Of the firms that rely on imports for their raw materials, 48 percent indicated foreign currency shortages negatively affected supply.
“Prices of raw materials related to foreign currency shortages is also a major factor affecting supply of raw materials,” said CZI.
The banking sector has, however, indicated that priority would be given to manufacturing firms in foreign currency allocation, especially those into exports. This is expected to help increase foreign currency earnings from exports. Exports, especially from mining and agriculture are the biggest contributor to the country’s foreign currency coffers.
Online Reporter