Confederation of Zimbabwe Industries (CZI) has expressed the need to maintain confidence boosted by the new economic dispensation that has been created by His Excellency President Emmerson Mnangagwa during the inauguration speech last year. The Zimbabwean President raised hopes as he announced that the country, which had been isolated from the international community for years, was now open for investment.
Key conclusions of the CZI’s 2017 fourth quarter Business Confidence Index (BCI) states that the new dispensation coupled with President Mnangagwa’s inauguration speech in addition to the National Budget presentation by the Minister of Finance Honourable Patrick Chinamasa has boosted confidence.
“While expectations are high, the overall situation remains difficult for industry. Investment, production, employment and order books have increased signalling increased activity in the manufacturing sector,” the BCI reads.
“To maintain confidence and improve the situation in industry, implementation of the stated policies and strategies should commence immediately. Further delay will result in reduced confidence in the coming period.”
The BCI also noted the deteriorating situation of Raw Material supply and speed of supplier delivery.
“The situation on raw material supply and speed of supplier deliveries is deteriorating. This is largely due to foreign currency shortages and CZI has in different submissions proposed an Importer Financed Export incentive scheme to ease the Foreign Currency shortages.” CZI said.
“The Enhancing the Nostro Stabilisation facilities by $400m as recently announced in the monetary policy statement by the (RBZ) Governor, Dr (John) JP Mangudya will not be sufficient to meet the foreign currency requirements of the productive sector.”
Nostro account refers to an account that a bank holds in a foreign currency in another bank and the Reserve Bank of Zimbabwe (RBZ) Governor Dr Mangudya revealed in the country’s monetary policy statement that the central bank is working on an additional US$400 million nostro stabilisation facility to deal with delays in the processing of foreign payments. The facility will be added to a US$600 million for the nostro stabilisation facility from the Cairo-headquartered African Export Import Bank (Afrexim) to mitigate a foreign currency crisis that had affected imports and consequently the availability of basic food commodities.
Besides the inauguration speech, Zimbabwe’s President also raised confidence in business in Zimbabwe during the World Economic Forum in Davos by maintaining that investors were free to invest in the Southern African country. CZI has been assessing business conditions in the manufacturing sector on quarterly basis and has used the BCI, which measures the amount of optimism and pessimism that business managers feel about the prospects of their companies or organisations, for the fourth quarter in 2017.
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