The Confederation of Zimbabwe Industries (CZI) want the Government to set up a a foreign currency trading platform to curb the parallel forex market.
According to the industry representative body, the forex trading platform should be accompanied by liberalization of the forex trading, which will mean abandonment of the official 1:1 rate.
CZI chief economist Tafadzwa Bandama said:
“There is need for a foreign exchange trading platform so that foreign currency is traded at a fair value. This will enable product availability, price stability and business viability.”
Added the economist:
“If there is no drastic change in policy direction foreign currency shortages will persist and the 1:1 exchange rate is affecting availability of forex.
“Low levels of capacity utilisation means companies are eating into capital.
“Capacity utilisation will decline because there is no forex to import raw materials.”
The country abandoned its own currency in 2009, adopting the use of foreign cash. The government later issued a surrogate currency – the ‘bond notes’ in 2016 to ease the continuing cash shortages.
Despite pressure from a number of quarters, the government last yeer maintained that the bond note and electronic dollars would remain officially pegged at 1:1 to the U.S. dollar as it government sought to protect people’s savings.
But the official rate has proved unviable resulting in the proliferation of illegal forex trading.
Notwithstanding the challenges that have been affecting Zimbabwe’s industry, the CZI reports that overall output for the sector grew by 12.1% last year.
Output increased in tandem with improvement in capacity utilisation which recorded a 3.1 percent increase from 45.1% in 2017 to 48.2% in 2018.