Reserve Bank of Zimbabwe Governor Dr John Mangudya has said the shortage of foreign currency in the country implies that the economy is expanding, during the Private Sector Development Round-table in Harare today.
The Africa Development Bank Group (AfDB) planned the round-table which was going with the theme “A New Dawn for the Zimbabwean Economy? The role of the Private Sector”
“The economy is expanding, the business outlook of this economy is positive and I am saying that what is the reason for the foreign currency shortage? It’s because the rate at which the economy is expanding is faster than the rate at which we are creating foreign currency to meet that demand,” Mangudya told journalists on a side interview.
Mangudya also said foreign currency shortage implies that the economy is growing and if it was collapsing the foreign currency would have been sufficient.
The governor gave reference to the performance of the companies as to the reason why he said the economy is expanding.
“The economy is expanding, big time,” Mangudya told the journalists. “Go to Triggers, go to… they will tell you they are expanding.”
“So why are they expanding? It means that there is higher demand and they are also exporting,”
“We saw Delta, we saw OK, we saw Proplastics… They are saying what? The profit they got has improved because the demand is increasing,” Mangudya continued.
Although Mangudya related foreign currency shortage to a positive economic outlook, President Emmerson Mnangagwa said that the government will announce a strategy to to alleviate the challenge.
“I am aware of the cash and foreign currency challenges which are a result of various reasons,” the President said. “My government is seized with the matter and will in due course announce comprehensive strategies to conclusively alleviate the problem.”
“I urge our industry, commerce and SMEs alike to focus on business models that generate foreign currency for the country,” the Zimbabwean leader said during the official opening of the women’s bank.
Zimbabwe has been having foreign currency challenges since 2016.
The Central bank is rationalising foreign currency allocation on companies and in different sectors to curb the shortage.
Companies have been having challenges in purchasing raw materials due to foreign currency shortage in the country.
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