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Following Tuesday’s foreign currency auction, the Zimbabwe dollar was stronger for the fourth consecutive week against the greenback.
A record US$31 million was also allotted with the bulk going toward the importation of raw materials. This strengthening of the local currency is commendable and we expect the authorities and economic players to consolidate on the prevailing stability in the economy.
An interesting observation however is that there are still fewer players from the small to medium enterprise (SMEs) sector that have come forward to participate. Since inception of the SMEs foreign currency auction system, the highest number of bids per SMEs forex auction is 117.
For a country that is said to be SME driven fewer participants at the FX auction compared to large corporates should be a major worry. What could be the reason? Lack of formalisation? SMEs not banked? Onerous processes?
Policymakers should seek answers to these questions and use them to create a conducive environment that incubates small businesses and encourages them to formalize their operations.
Bongani Ndlovu