adminCharity Ruzvidzo Business Reporter
THE continued usage of the US dollar in Zimbabwe is fuelling the influx of cheap imports as foreign producers are targeting the hard currency because of its dominating influence in terms of value, an official said yesterday.
Given the weakening of the South African rand against the US$ and devaluation of other currencies from neighbouring countries, producers are chasing after the dollar which is presently the main currency in Zimbabwe, Pretoria Portland Cement (PPC) Zimbabwe managing director Njombo Lekula told Business Chronicle.
He said that while the adoption of the multiple currency system in 2009 has tamed inflation and stabilised the economy, it has made Zimbabwe a target for cheap imports.
“As manufacturers the introduction of the US dollar is commendable since it has assisted in stabilising the economy. A lot of companies have invested in US dollars and have managed to stand back on their feet.
“However, it has also attracted foreign manufacturers to come into the country especially our regional neighbours because the currency is much stronger,” said Lekula.
The government has said it has no plans of re-introducing the local currency any time soon insisting that the use of multiple currencies would continue.
The Reserve Bank of Zimbabwe buttressed the position in its midterm monetary review statement. Lekula also said PPC was facing challenges in terms of consolidating its market share citing pressure from imports from Botswana and China.
“Recently, a new plant was opened in South Africa a nation which is producing more than the demand. Zimbabwe becomes the next target thereby putting PPC at a high risk of losing market share. Botswana and China are also bringing in cheap imports,” he said.
Lekula however said PPC had put in place survival strategies aimed at boosting business competitiveness on the market.
Online Reporter