Zimbabwe’s commerce minister ‘too busy’ to meet Rob Davies
BULAWAYO— Zimbabwean Industry and Commerce Minister Mike Bimha said he has been too "busy" to meet his South African counterpart to discuss the effect of a recent import restrictions imposed by Zimbabwe.
Bimha gave no indication of when he and Trade and Industry Minister Rob Davies would meet to discuss the policy. He was speaking from an industry conference at which Reserve Bank of Zimbabwe governor John Mangudya also warned against an overnight adoption of the rand as a solution to the liquidity crisis in the country.
SA has cautioned that its northern neighbour could be liable for violating trade agreements that compel it to allow the free movement of goods within its borders.
"I still have not met him (Davies), I have been too busy and I also did not manage to travel to the UN Conference on Trade and Development (meeting) held in Kenya this month, where I had thought we would meet," he told BDlive on Thursday.
READ THIS: Davies awaits next move from Harare
It has been nearly a month since Zimbabwe enforced Statutory Instrument 64 of 2016, which restricts the import of 43 products mainly from SA. The restricted items include coffee creamer, camphor cream, jam and petroleum jelly.
Bimha was in Zimbabwe’s second-largest city to attend the annual congress of the Confederation of Zimbabwe Industries (CZI), the largest industry body in the country, where he gave the official opening address.
The three-day congress, held under the them: Strengthening Value Chains for Sustainable Industrialisation and Economic Development, was due to end on Friday.
SA’s envoy to Zimbabwe, Mphakama Mbete, was also attending the CZI congress, at which Zimbabwe’s captains of industry rallied in support of import restrictions, which they said made their products uncompetitive. Capacity utilisation in the Zimbabwe’s manufacturing sector is estimated at only 35%.
Mbete refused to comment on the strong sentiments in support of Statutory Instrument 64 of 2016, despite mounting regional pressure for Zimbabwe to rescind the new policy.
The use of the rand as an alternative medium of exchange to the US dollar took centre stage at the congress on Thursday.
Dairibord Zimbabwe CE Anthony Mandiwanza told delegates that the country needed to keep the US dollar as a reserve unit, while making use of a "soft currency" for exchange.
He also said the strong ties between Zimbabwe and SA made the adoption of the rand a logical move. "We need to have a hard currency for reserves and a soft currency for use as a transactional currency," he told said.
The US dollar was adopted as the preferred currency following the local currency being abandoned in 2009. The Reserve Bank of Zimbabwe said the use of the US dollar was currently at 95%, while the rand accounted for 5% of transactions.
In his address at the congress, Mangudya said it was undeniable that the two most used currencies in Zimbabwe were the US dollar and the rand. He ruled out the possibility of a local currency as another measure to increase liquidity in the economy.
"In the short term what we need is acceptance, eventually sometime when the fundamentals are right, then only then can we talk about our own currency. Those fundamentals are our reserves position, which must be a year’s supply, industrial capacity utilisation must be above 75% and there must be confidence, both from business and consumers. Short of this, any new currency would be dead on arrival," Mangudya said.
He also warned that a switch to the use of the rand could not be done overnight as that could be disruptive.
"Any disruptive measure will mean people will lose money through currency fluctuations," he said.