UNITED Nations Development Programme resident representative in Zimbabwe, Ayodele Odusola, has called on the government to revisit the central bank’s export retention policy as it is scaring away investors.
Foreign currency retention thresholds are standardised at 75% except for small-scale gold producers.
Local exporters are required by law to surrender the remaining 25% to the Reserve Bank of Zimbabwe in exchange for local currency.
The move, according to the central bank, is meant to enhance foreign currency resources needed to settle national and international obligations as well as shore up the volatile Zimbabwe Gold currency.
“Over time, I have had the chance to talk to many investors and I have noticed that we need to address the issue of what we call business competitiveness.
“One of them could be the export retention of 25%,” Odusola said, during a Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) dissemination breakfast meeting in Harare yesterday.
“I have had the opportunity to discuss with many foreign investors to come and invest in Zimbabwe, but they ask me, ‘what we do with this tax?’ And it scares away investors. I know it goes beyond what the Ministry of Industry and Commerce can do alone. It has to be looked at by the Ministry of Finance.”
The ZIRGP (2024-2025) is a new industry policy framework launched last month. It addresses the pressing challenges faced by different sectors of the economy while aligning industrial development with the upcoming National Development Strategy 2 which runs from 2026-2030.
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Bulls to charge into Zimbabwe gold stocks
- Ndiraya concerned as goals dry up
- Letters: How solar power is transforming African farms
Keep Reading
“For us to achieve the objective that was set under this particular policy, we must end exporting primary commodities. Any country that specialises in exporting its primary commodities is exporting its jobs, its wealth creation,” Odusola said.
“So, this is one very important thing, but if I give you one example in the area of data, for you to say you want to export millions, the value is only gaining 10,5% of the overall process. Where value is being added, the company is accounting for almost about 90% of everything.”
He also urged Zimbabwe to leverage various opportunities that arose through the availability of vast raw materials in the country to transform the country’s industries.
Odusola said regional integration presents an opportunity for Zimbabwe to grow.
Provincial Affairs and Devolution minister for Harare Metropolitan Province Charles Tavengwa said the ZIRGP presented a transformative framework for revitalising manufacturing.
“It entails driving innovation through research and development while embracing digitalisation to modernise industries and enhance productivity,” he said, in a speech read on his behalf by the deputy director in the Ministry of Industry and Commerce, Spiwe Nyamatore.
“Furthermore, empowering SMEs (small and medium enterprises) by providing the necessary tools, resources and financial support will enable small businesses to thrive, creating jobs and stimulating economic activity.”
He said government was fully committed to making Harare the industrial and economic lead centre of Zimbabwe through strategic partnerships, innovation and unwavering dedication.
