Prosper Ndlovu, Business Editor
BUSINESSES should lead by example by trading foreign currency on the interbank platform instead of rushing to the parallel market, a senior banker has said.
Speaking at a ZimTrade export awareness seminar for small to medium enterprises (SMEs) in Bulawayo last Friday, a senior Nedbank Zimbabwe official, Mrs Rita Stevawo, said doing so helps restore trust and confidence in the financial services sector.
She said productivity was being severely hampered by parallel market exchange rate distortions, which are usually fueled by speculation.
While many businesses are crying foul over perceived forex shortages, Mrs Stevawo said adequate funding was available at banks, especially for exporters. She said her bank, for instance, was ready to disburse forex anytime to its exporting clients.
“As exporters you can still get your US dollars through your nostro accounts but the problem is that you rely on unofficial information. Foreign currency is there but you are scared by informal market distortions.
“For you exporters, your nostro accounts are still operating as it were during the US dollar era,” said Mrs Stevawo.
“When you buy forex from the black market, that is what is killing our industry. Banking is built on a relationship of trust and as businesses we expect you to be responsible. We are calling on you as business directors to be exemplary and don’t teach your employees to cut corners.
“Buying forex at a US$ rate of 21 or more on the black market is bad and yet at interbank rate it’s 16.”
Although Zimbabweans are feeling the pinch of a weakening local currency against the greenback, Mrs Stevawo said Zimbabwe dollar was among the strongest currencies in the region, ranked close to the South African rand and the Botswana pula. She made reference to Treasury’s projections, based on economic fundamentals, that the local currency could be stronger and retreat to US$1:ZWL$10 or less in the short to medium term.
As an authorised forex trader, Mrs Stevawo said Nedbank Zimbabwe has strong correspondent banking relationships given its wider regional and international footprint, which makes it best placed to assist exporting businesses with foreign payments. She, however, acknowledged that some local banks were struggling with foreign payments because of weak correspondent banking network due to the impact of Western sanctions imposed on Zimbabwe. Mrs Stevawo said although the country has suffered severe loss of skilled manpower over the years, businesses should take advantage of that by seeking synergies with those companies that are led by Zimbabwean born executives within the region and beyond. She acknowledged that local producers were facing numerous challenges that hinder their growth. These include high cost of production, high cost of financing at about 35 percent per annum, limited market information, limited value chain support, limited ease of doing business and policy inconsistency.