ZNCC dispels FAZ fears

Zimbabwe will negatively affect the country’s balance of trade.
Zimbabwe’s balance of trade is already constrained and the International Monetary Fund has projected it to worsen by more than 3 percent of the Gross Domestic Product this year due to uneven global commodity price movements.
Among other functions FAZ, which is operating under the ambit of the ZNCC, will bring together franchisers and franchisees from the local, regional and international market.
Some observers have, however, expressed concern at the potential of increased importation of products at a time when the country is facing a huge trade deficit resulting from a high level of imports compared to constrained exports.
In an interview with Herald Business, ZNCC president Mr Trust Chikohora said the impact of the association on trade was negligible.
“It will not change much because the majority of products in our local shops are imported.
“As a matter of fact, consumers will benefit in terms of low cost insofar as international franchises profit from huge volume discounts when they purchase their products,” he said.
Currently, imported products dominate local shelves on an 80:20 ratio, although the Industrial Development Policy that is under appraisal is targeting a 70:30 ratio in favour of local products as the country is focusing on industry capacity recovery. FAZ is expected in the long run to facilitate the development of competitive local brands.
Mr Chikohora added that FAZ would act as a critical mechanism for skills and technological transfer into the country.
“Most of the franchising will be between locals and companies in the region and internationally, which means the country is expected to benefit from skills, knowledge and technology transfer.
“The association will also contribute in a significant way to our GDP in view of anticipated employment generation that the establishment of new franchises will bring,” he said.
FAZ is structured as a non-profit-making organisation whose goal is to communicate franchise operators’ concerns.
Many Zimbabwean entrepreneurs are eager to open businesses or expand existing ones. However, they face a number of challenges with respect to ineffective marketing plans, inexperience in financial controls, and the lack of capital to finance new outlets.
It is to this extent that the FAZ can facilitate potential franchise arrangements.