Forex Auctions Increase URL Transactions
Oliver Kazunga, Senior Business Journalist
BULAWAYO-based agribusiness company United Refineries Limited (URL) says its operational efficiency has been improved through better forex access to the official weekly foreign exchange auction trading system.
The Reserve Bank of Zimbabwe (RBZ) operates the auction system, which was introduced in June last year to help the productive sector access much-needed hard currency to procure raw materials and goods. essential equipment.
To date, more than 4,000 businesses, including URLs, have been allocated currencies totaling US $ 1,968 billion through the auction system.
According to a list available by RBZ this weekend, of the companies that received the awards, URL received between January and August of this year US $ 13.9 million compared to US $ 6.9 million in December 2020.
In an interview with the CEO of Bulawayo URL, Mr. Busisa Moyo, who is also the chairman of the board of the ZITF company, said: “Previously we were facing foreign exchange constraints, but now we are getting foreign currency.
“Remember, when we get the foreign currency, we convert the raw materials into finished products.”
Mr. Moyo said the local market consumes products that URL produces and therefore the economy and industries down the value chain benefit.
URL produces a wide range of products including cooking oil, bath and laundry soap, flour flour and animal feed.
“We pray that the auction system continues, but we are aware that the government is working on other measures to ensure that capacity utilization in the manufacturing sector increases more and more,” he said. declared.
“As you know, the Zimbabwe Confederation of Industries (CZI) is targeting 61% capacity utilization, our sector is currently between 40 and 50%.
“We would like to see this 61 percent target achieved and we would also like to go beyond that in exports,” Moyo said.
Overall, Zimbabwe’s export earnings for the first eight months of the year reached US $ 5.09 billion compared to US $ 3.85 billion received in the corresponding period last year. Moyo said an export-oriented economy would be beneficial for the country as a whole, as it promotes industrialization and job creation.
“We are satisfied with the direction we are taking. We would like to see continued sustainability for stability and expansion, which will require conversation and planning as we don’t want to stay where we are, ”he said.
“We want to develop in order to be able to export to the region and elsewhere. “
As an agribusiness company, Mr. Moyo said that farmers are essential to URL operations and as a result, the company engaged agricultural players as part of an alliance of producers of soy.
This year, the manufacturing company would directly engage farmers, recruit them and select them for a soybean farmer alliance program of at least 20 hectares.
The agro-processor is also working with local financial institutions such as CBZ and the Agricultural Finance Company (AFC), formerly Agribank, to unlock funding for its contracts.
Meanwhile, the Reserve Bank said it was upholding the measures set out in the medium-term monetary policy statement regarding the clearance of the arrears of foreign exchange allocations of around US $ 175 million. .
In this context, the monetary authority assured companies carrying out transactions during the auction system that the order book would have been absorbed by the end of this month. – @okazunga