The government’s decision in introducing statutory instrument 64 of 2016 raised hopes for improved productivity however, a combination of inadequate foreign exchange weak domestic demand, high costs of borrowing and old machinery is threatening the ability of local firms in sustaining both internal and external demand.
The drop in the level of imports is being rendered critical in facilitating growth of local companies.
While there is commitment by industry to continue increasing production the current high lending rates is making it difficult for firms to compete on the external markets as well as charging favourable prices, says an industrialist Mr Shephered Kembo.
But taking into account the recapitalisation efforts by local companies in line with an improvement in capacity utilisation to an average of 47 percent by 2016, the current limited foreign exchange is creating difficulties for companies to procure strategic inputs and new machinery, notes Zimbabwe National Chamber of Commerce president Mr Davison Norupiri.
While the decline in trade deficit reflects positive results from the tight import control regulations, African Century Leasing managing director Mr Stanley Matiza asserts it is however the weak local consumer demand that is posing a challenge to firms in increasing revenue margins.
While the government and the Reserve Bank of Zimbabwe are doing their best to come up with rescue packages and policies to retain the scarce foreign exchange it is now upon the private sector to increase exports thereby improving hard cash inflows.