A prominent industrialist has said competing regional manufacturers are fishing for United States dollars in the Zimbabwean market.
Charles Msipa, managing director of Schweppes Zimbabwe Limited (SZL), observed that the quick dollarisation of Zimbabwe’s economy will be accompanied by a surge in imports onto the local market.
Msipa was commenting on the proliferation of the Mazoe Orange Crush beverage imported from neighbouring Zambia, according to The Independent. Msipa said:
Schweppes Zimbabwe Limited has adequate stocks of juice to meet the demand for local and export markets. As our economy dollarises, we will see an influx of imported consumer products from regional markets “fishing for US dollars in the Zimbabwe market.
This was the case from 2010-2016 and involved various consumer products from Zambia, Mozambique, Malawi and South Africa. As we dollarise, the local industry becomes less competitive with a US dollar cost base and products from markets with softer currencies become more competitive in our US dollar market.
SZL is currently exporting 10% of their Mazoe cordial output to Botswana and South Africa.
During Zimbabwe’s first dollarisation spell which came in 2009, local retailers imported goods mostly from South Africa.
The government opened up for the importation of some goods duty-free as a way of improving access to affordable basic commodities arguing that the local industry was raising prices because it had no competition.
This gave regional industrial enterprises the chance to enter the Zimbabwean market in search of the US dollar.
Industry analysts predict that industry capacity utilisation which is now at a 10-year high level of roughly 60% will further drop as a result of market liberalisation and the dollarisation of the economy.