18 October 2017
   
Govt to slash budget deficit by half
Kenya: Top election official resigns
Grace approaches High Court over $1,4m ring
Byo violence: Khupe tackles Tsvangirai
Anger as Mujuru secretly meets Code partners
Mugabe death prophet to contest Gutu South
Mujuru: vendors a sign of Mugabe misrule
Teen ties, gags little girl, anally rapes her
MORE NEWS
Cash Crisis: Alarm as drugs up by 70pct
TM performance boosts Pick n Pay revenue
MORE BUSINESS
WorldRemit backs ZimAchivers US, Oz
Award has spurred creativity: Mungoshi
MORE SHOWBIZ
Fired Rusike surfaces at Zambia's Zanaco
Taylor, Jarvis in Zimbabwe squad
MORE SPORTS
Susan Dangarembga: Pioneer and liberator
Unlike Google, Zanu-PF is not Uber
MORE OPINION
 
Gonda Interview: Succession underway
BVR: Are political games now at play?
MORE COLUMNISTS
 
 

Retailers say food shortages likely as cash crunch bites

 
06/09/2017 00:00:00
by The Source
 
 
RELATED STORIES
MDC-T wants food crisis probe
UN agency says 2.2 million need food aid

Z


Advertisement

IMBABWE’s retailers have warned of possible food shortages as it becomes increasingly difficult for the country to process foreign payments to raw material suppliers outside country, with the backlog estimated at $180 million. 

Businesses have been struggling to make foreign payments since the banknote shortage intensified at the beginning of 2016.

Zimbabwe dumped its inflation-ravaged dollar in 2009, adopting the use of the United States dollar and, to a lesser extent, South Africa’s rand. However, a widening trade gap, on the back of declining local production, and illicit financial flows have left the country in a liquidity trap.

Government has drawn up a priority list for foreign payments and imposed a ban on some imports it deems to be non-essential in a bid to manage the little available foreign currency.

Over the past year, local retailers have resorted to buying foreign currency on the black market at a premium to facilitate imports, which they say comprise on average of 40 percent of their current stock.

Confederation of Zimbabwe Retailers (CZR) Marketing and Stakeholder Relations Director, Alois Burutsa told a meeting with central bank governor, John Mangudya that most local shops were failing to import crucial product lines as local banks are failing to process international payments on time.

“Payments have not been going through fast enough for both the manufacturing and retailing sectors. We are afraid that shortages challenges have started to creep in driven by this,” Burutsa said.

“The problem is very soon we will be unable to supply certain imported lines because the cash premiums are just unsustainable. You will find that they (cash premiums) range from 10 percent to as high as 35 percent,” CZR president Denford Mutashu told the same meeting.

Mangudya said the apex bank was working to ensure the situation did not escalate further.

“Naturally, (food shortages) are a possible outcome. However we have put measures in place to ensure that payments go through, albeit slowly, but go through all the same,” said Mangudya.

In a Monetary Policy Statement last month, Mangudya said the central bank was negotiating a $600 million nostro stabilisation facility from Afreximbank to manage the cyclical nature of Zimbabwe’s foreign currency receipts.


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark

 
 
 
comments powered by Disqus
 
RSS NewsTicker