NatFoods bemoans US$ shortages on official market

By Alois Vinga

FOOD manufacturer, NatFoods says critical US$ shortages on the official market are choking the smooth flow of business on the back of calls for supportive measures to enhance ZWG acceptability going into the future/

Introduced on April 5 2024 by the Reserve Bank of Zimbabwe (RBZ), the ZWG currency is the country’s first-ever Structured Currency which is supported by a cocktail of minerals and foreign currency.

After taking off on a high note, maintaining a stable exchange rate of US$1: ZWG 13, 86 in the first four months, the ZWG has weakened significantly forcing the central bank to devalue the currency by 43% last week in a bid to close the wide parallel market rate.

Several industry lobby groups have identified inadequate foreign currency access on the Willing Buyer, Willing Seller market as one of the causes behind exchange rate pressures.

Echoing similar sentiments in the half-year results, NatFoods chairman, Edwin Manikai decried US$ shortages on the official market and called for the urgent need for supportive measures.

“The final quarter of the year under review saw currency reform measures instituted by the monetary authorities through the introduction of a new structured currency, the Zimbabwe Gold (ZWG). Notwithstanding these progressive steps to broaden the multi-currency basket, market liquidity in the form of access to local debt facilities and foreign exchange via the WBWS platform remains severely constrained,” he said.

In addition, Manikai said the market remains limited in its ability to transact with the ZWG, with many key commodities such as fuel, power, raw materials, as well as human capital and certain statutory payments, mostly requiring settlement in United States Dollars.

“Whilst the Group welcomes the addition of the ZWG to the multi-currency basket, the success of this initiative will be dependent on further supportive measures, which amongst other things, will allow users to seamlessly interchange between currencies; this will naturally result in greater market acceptance, and use, of the new local currency,” he said.

However, the RBZ has since announced a raft of measures aimed at easing exchange rate volatility which citizens and members of the public await to see how far they will go in yielding positive results.