Industry commends RBZ Auction’s consistency, warns power cuts will reverse gains

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By Alois Vinga

CONFEDERATION of Zimbabwe Industries (CZI) says while the consistency exhibited by the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction is welcome, such gains will be eroded if the power situation does not improve.

The nation has been subjected to incessant power outages since last year, exceeding 20 hours in some instances.

Speaking to at the close of RBZ’s Auction trading Tuesday which saw industry getting a huge chunk of the US$18,7 million allotments, CZI president, Kurai Matsheza said the efforts risk being eroded by the prolonged power cuts.

“We commend the central bank’s consistency which when coupled with other facilities like FCA Nostro accounts and US$ sales will go some way to cushion industry’s foreign currency needs.

“But the main challenge we are now facing are power outages. Some of our members are running on generators but the strain being imposed by the prolonged electricity outages makes it difficult to keep running,” he said.

The industry lobby group’s leader said most companies are taking time to make use of the allotted funds due to limited production timeframes; a development he warned will have a huge impact on the broad economy.

“Right now we do not have much to report on for the year’s first quarter because that’s when we were hardest hit by the power outages and if this continues the impact will be catastrophic,” said Matsheza.

However, this week authorities announced that a new 300 megawatt (MW) coal-fired power generating unit started feeding electricity into the national grid late on Monday amid assurances that electricity outages will ease thereafter.

Zimbabwe is expanding its 920 MW Hwange thermal power station by adding two 300 MW units at a cost of $1.4 billion, with 85% of the funding coming from China.

Meanwhile, on the RBZ Main Auction, the total number of bids accepted reached 266 with the highest bidding rate of US$1: ZW$ 1000 and a low of ZW$915.

Raw material bids received US$7,3 million , machinery and equipment US$3,1 million, consumables US$1,3 million, services US$1,4 million, Retail and distribution US$2,1 million among other productivity related priorities.

A grand total of US$18,7 million was allotted on both the Main and SMEs Auction.

The official exchange rate closed the day at US$1: ZW$915, 18.