daniel chigunwe
Business Writer
Zimbabwe’s abattoirs are grappling with severe liquidity challenges due to the rigid enforcement of currency policies by the Reserve Bank of Zimbabwe (RBZ), creating a sharp divide between the rural farming sector and the urban wholesale and retail markets.
This discrepancy is placing significant strain on the industry, as highlighted by Dumisani Murindagomo, Chairperson of the Zimbabwe Association of Abattoirs (ZAA) in a statement seen by this publication.
“Commercial abattoirs are forced to buy all livestock for commercial slaughter in US dollars because Zimbabwe’s rural economy has remained 100% dollarized since September 2020,” said Murindagomo.
Despite adhering to RBZ policies, these abattoirs find themselves in a precarious position, as urban butcheries and supermarkets, under strict monitoring by the Financial Intelligence Unit (FIU), predominantly pay them in Zimbabwe Gold (ZiG).
This currency mismatch has left abattoirs inundated with ZIG but critically short of US dollars necessary to purchase livestock from rural farmers, who insist on payment exclusively in US dollars.
“The prolonged absence of a domestic Firm2Firm currency swapping or exchange platform is starting to hurt domestic trade and commerce and undermining the integrity of the multicurrency trading system,” Murindagomo warned.
Although the Ministry of Finance had promised to establish a platform to facilitate currency swaps between businesses, its absence is now acutely felt.
“There is still no lawful bank-intermediated platform where law-abiding businesses can engage in mutually beneficial domestic currency swaps,” Murindagomo added.
Without an interim policy to address this issue, the flow of meat through policy-compliant butcheries and supermarkets is at risk.
“An interim policy accommodation to allow commercial abattoirs to continue doing business with supermarkets and rural farmers is urgently needed,” emphasised Murindagomo.
Without such measures, the supply chain is likely to slow down and potentially dry up, exacerbating the liquidity crisis and threatening the stability of the multicurrency trading system in Zimbabwe.
As the situation stands, the industry awaits a timely intervention to ensure that both rural farmers and urban markets can continue operating smoothly, safeguarding the nation’s meat supply and economic stability.
Bongani Ndlovu