Zimbabwe’s weak dollar plumbed fresh depths to hit $24m to the greenback on the thriving parallel market this week, after opening the year at $1.9m. The official ‘fixed’ exchange rate is US$1 to Z$30,000, which means US$100 is not enough to buy a loaf of bread at Z$4m.
Textile jobs under threat
Textile bosses have warned some companies are on the verge of collapse due to the high price of cotton lint, and the high duty imposed on imported raw materials and inputs. Â
An official of the Textiles Manufacturers’ Association of Zimbabwe, James Clive, last week said thousands of jobs in the industry and valuable export markets would be lost unless Government urgently considered a discounted lint price and a relaxation on duty.
Clive, who also owns Advance Garment, said the price of lint increased from $6m a kilogramme to $15m. The industry estimated this hike would, in turn, increase costs by more than Z$100bn, based on the 48,000 tonnes a year needed by the industry.
“We can’t pay world prices because we are paying high interest rates and taxes, and we have no export incentives to talk about,” said Clive. Â
He suggested Government should provide a subsidy to the industry through cotton marketing companies such as Cottco to enable spinners to buy lint at discounted prices and remain competitive on the export market.
He also suggested Government should increase duties and surcharges on imported textile products, introduce penalty duties on dumped goods, ban the sale of imported second-hand clothing and help reduce transport costs for exporters through a special transport levy.
Informal traders need to come on board
Unregistered traders should organise themselves and claim their position in the economic growth and development of the country, says Minister of Small and Medium Enterprises Development Sithembiso Nyoni.
Nyoni expressed concern over the proliferation of unregistered traders whose high prices were threatening the operations of the sector when she toured the Harare Exhibition Park, a new venue for informal traders.
More than 1,700 informal traders are set to benefit from the new marketing facility set up with help from the Zanu (PF) Harare province leadership.
Province Chairperson Ambassador Amos Midzi promised to work with the City Council to seek clarity over the allocation of trading places and find other facilities for the traders.
ZINWA to repair biogas plant
The country’s water authority says it is rehabilitating one of its plants, which has the capacity to produce electrical energy, so reducing energy consumption and helping the utility cut operational costs.
Engineer Simon Muserere said the Zimbabwe National Water Authority (ZINWA) had sought a partnership with local company Energy Resource Africa in a bid to rehabilitate its digester plant. When completed, the plant would be able to produce biogas, which, in turn, could be used to generate electricity for the sewage plant.
There are sixteen primary digesters and four secondary digesters at Firle.
LonZim pays $3m for Paynet Â
LonZim plc has signed an agreement to buy Paynet Limited for just under US$3.2m – a sum to be paid out of cash reserves.
Included in the acquisition is the newly built commercial property in Harare from which Paynet Zimbabwe operates.
Paynet Zimbabwe provides an electronic funds transfer (EFT) system that automates the process of companies transmitting bulk payment instructions to their corresponding banks and financial institutions such as salary transfers, supplier/trade payments and direct debits. Â
David Lenigas, Executive Chairman of LonZim, said the purchase of Paynet “strategically complements LonZim’s previous investment in the Zimbabwean publicly listed company Celsys. Â
“These are businesses that are already successful in the current economic environment, demonstrating their strength and potential, and are incredibly well positioned to benefit significantly from an economic upturn in Zimbabwe,” he said.
“With low overheads and a strong and established client base, we believe that the acquisition adds considerable value to the growing LonZim portfolio of companies and we look forward to building the LonZim stable of financial companies in this exciting market.”
Post published in: Economy