Companies feel heat from cash-crisis

via Companies feel heat from cash-crisis – DailyNews Live Bernard Chiketo in MUTARE • 14 April 2016

MUTARE – Zimbabwe’s crunch cash crisis is threatening the viability of the few struggling local industries which are now failing to pay their international suppliers even though they have money in their accounts.

Quest Motors chairman Gulam Adams revealed this to vice president Emmerson Mnangagwa during his recent tour of industries here.

Adams told Mnangagwa after a tour of the assembly plant that their relationship with suppliers is being strained by cash shortages in the financial sector since local banks are failing to send through their payment requests to suppliers.

“At the moment our suppliers are saying they cannot continue supplying us if we are not paying. We are making the transfers but the banks cannot honour our payments on our behalf due to the current cash shortage,” Adams said.

Adams later said the challenges facing the local motor industry have resulted in the country spending over $5,3 billion on car imports since 2009.

Quest Motors is planning a regional excursion for export markets in the face of low local uptake for its vehicles, has not been spared by the cash crisis that has seen most banks running out of cash and also introducing withdrawal limits.

The company’s director, Tarik Adams said his company’s biggest impediment has been the importation of every component in their vehicle assembling process which disqualified them from exporting regionally.

“There is a 40 percent input benchmark for regional states to be eligible to export at a discounted duty,” Tarik told the Daily News during a recent manufacturing plant exhibition.