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Business Editor
ZIMBABWEAN businesses will hold the first internal devaluation symposium in Harare early next month to discuss ways of reducing production costs and enhancing domestic product competiveness.
In the context of a widening trade deficit estimated at $3 billion annually and increasing imports, experts have proposed internal devaluation – a holistic internal cost reduction strategy on standard business input costs such as finance, labour, utilities, taxes and the general cost of doing business.
Confederation of Zimbabwe Industries (CZI) president Busisa Moyo said the prevailing cost structure was working against the viability of local firms.
“We’ll have an internal devaluation symposium on December 9. The cost base in Zimbabwe is very high. We need to look at this because essentially it means we’re paying for inefficiencies which are reflected in our competitiveness levels,” said Moyo.
“We need to look at how to rebase our economy and come up with a cost base that makes sense. We need to look at interest rates which are very high and see how we can be competitive.
“The Zimbabwean market is too small and we need to think regional hence the issue of competitiveness. We’re losing the export market and we can’t solve this unless our products are competitive. We need to think bigger and broader.”
Bulawayo businessman Dumisani Sibanda said embracing internal devaluation was crucial given the weakening of the rand and the kwacha, which makes exports more expensive and imports cheaper.
“We need to re-model our cost structure. Unless we come up with a competitive strategy things can’t be right,” said Sibanda.
The government is also working on establishing a National Competitivess Commission which seeks to create a level playfield and enhance domestic product competitivess against imports.
Sidumisile Mabena
Online Reporter