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Business Writer
The country has witnessed a general price stabilisation during the second half of the year due to increased local production and a favourable exchange rate policy, Industry and Commerce Minister Dr Sekai Nzenza said.
Some companies took advantage of trade restrictions resulting from Covid 19 pandemic and raised production with the industry registering increased capacity utilisation.
On the other hand, the launch of the foreign currency auction system improved access to foreign currency for importing critical raw materials.
“The Ministry of Industry and Commerce working together with industry has managed to tame price instability that had characterised the first half of the year,” said Nzenza.
“Industry has responded to the Ministry’s Local Content Strategy as witnessed by increased local sourcing of raw materials. The commercial sector also had a positive response to the Buy Local Strategy, which resulted in more than 80 percent of goods on the shelves of most retailers being locally manufactured.
“Government will therefore continue implementing the import substitution strategy as it is critical for increased local production, employment creation and stabilisation of prices on the domestic market.”
Dr Nzenza said the foreign currency auction system introduced by the Reserve Bank of Zimbabwe has played a critical role in the stabilisation of prices. On average, industry requires US$100 million per month to import raw materials and the auction system had been sufficient to allow access to foreign currency to fund imports.
The amount traded on the system has also assisted small to medium businesses.
“Industry has reported increased capacity utilisation as a result of the auction system and business confidence has gone up,” said Nzenza.
The minister said the general stability being obtained has several merits to both producers and consumers and the economy at large.
“It is as a result of this stability that we now have improved business confidence, which we need for business, investment and economic growth.
“On the supply side, stability has brought in an improvement in the aggregate supply of goods and services on the local market. Companies are now able to budget or plan long-term, which should improve productivity, output and economic growth,” said Nzenza.
“Consumers can now save and plan on consumption and not panic buy as we were witnessing during the period of shortages.
“Retailers have also benefited from reduced complexities associated with the need to often change prices in order to keep up with the exchange rate which was changing frequently.”
Nzenza said price stability and growth would only be maintained by combined current and continued future implementation of development policies such as the Zimbabwe National Industrialisation Development Policy (2019 to 2023), the Local Content Strategy and the new National Development Strategy 1 (NDS1) (2021 to 2025) as well as other Government policies that aim to achieve Vision 2030 agenda.
The NDS1 that is replacing the Transitional Stabilisation Programme whose tenure comes to and end at the end of this month, is the seeking to propel the country to a middle income economy by 2030. The Government is implementing the NDS in phases, with the second and final state targeted to start in 2026 to 2030.
Bongani Ndlovu