Source: CZI distances manufacturers from any act of externalisation of funds – Sunday News Jul 10, 2016
Dumisani Nsingo, Senior Business Reporter
THE Confederation of Zimbabwe Industries (CZI) has distanced manufacturers from any act of externalisation of funds in the wake of the prevailing cash shortages in the country.
CZI president Mr Busisa Moyo said the country’s big companies had a reputation to protect and as such could not afford to engage in any financial or monetary skirmishes as this has a bearing in compromising their relationships with their shareholders and clients.
“Large manufacturing concerns and large corporates cannot really play around with the issue of cash deposits because they are very visible. Publicity for us (big companies) can affect markets and shareholders. Some of us have foreign shareholders and licences, we just cannot afford bad publicity.
“So from what we have seen, most of our companies are depositing, where the banks have said you either export or you pay cash, this has been the challenge so sometimes we take cash but it goes straight into the banks, we are not taking it out of the country so it’s still circulating,” said Mr Moyo.
He said as manufacturers they were sceptical if wholesalers were depositing cash into banks.
“We were not sure about the wholesale trade, we didn’t know whether they will deposit into the banks because we sell to wholesalers but when we take the cash for our products sales, we know it goes into the bank and say to the banks we are bringing the cash in and the bank is kinder to us in terms of allocating those nostro balances and paying for our foreign wholesales because you have two options if you want foreign payments, you either increase your exports or you deposit cash,” said Mr Moyo.
He said banks tend to prefer cash deposits instead of Real Time Gross Settlements (RTGS).
“Cash is better than RTGS balance in terms of the eyes of the bank so that’s what has led to this desire to be deposited into a bank for the products we will have sold for cash,” said Mr Moyo.
He further said: “In the issue of bond notes, exporting incentive is good because the incentives allow you to reduce some of those costs or to sell at a lower price to your export markets and creates more business”.
Two months ago the Reserve Bank of Zimbabwe threatened to cancel the licenCes of banks and foreign-currency dealers found to have violated new exchange-control regulations aimed at easing a dollar shortage.
The central bank sent a directive changing the way banks and other authorised foreign currency dealers are required to handle export earnings, adding measures aimed at encouraging companies to export their products through an incentive payment.
The banking regulator also plans to bolster compliance monitoring systems to ensure adherence to the rules.
Zimbabwe, which abandoned its own currency in 2009 because of hyperinflation, trades in a multi-currency basket although the American dollar has been predominantly used.