Paramount fails to access forex through interbank market

BY MTHANDAZO NYONI

GARMENT maker Paramount Garments says the interbank market, which was introduced to ease foreign currency shortages, has not been useful to it as the firm has failed to access forex through the system due to unclear allocation criteria.

The government launched the platform in February this year in an effort to curb a booming parallel market for foreign currency.Paramount Garments managing director Jeremy Youmans told NewsDay in an e-mailed response that the platform was yet to gain traction as they were failing to access forex.

“The interbank market has not been of use to us. The principle set up by the RBZ [Reserve Bank of Zimbabwe] was that there would be priorities on allocation of the funds. It is difficult to get to the bottom of who is doing the allocating as each party blames the other,” he said.

“We are a significant exporter but we are still a net importer ie we import more than we export. This is because the raw materials we need to manufacture garments for the local market have to be imported,” Youmans said.

By doing the value addition of garments in Zimbabwe, Youmans said they were employing large numbers of people and earning the country large amounts of forex. He said they were also manufacturing for the local market.

“We create a significant amount of import substitution, as the finished garments would require vastly more foreign currency than the raw materials do. All other clothing companies I am aware of have the same issue. This is stunting our ability to grow, employ and realise the industrialisation we are all trying to achieve,” he said.

As a way forward, Youmans said the criteria for allocation needed to be revisited and enforced.“This is not an onerous task. Now that electricity and fuel are no longer being subsidised, more forex should be available to support the manufacturing sector to import those raw materials not manufactured locally and capital equipment to upgrade our operations,” he said.