Close shave as Mugabe stumbles at ZITF

NATIONAL Foods Holdings (Natfoods) has partly blamed government’s waiver allowing duty free imports of basic commodities for its US$1,4 million loss before tax.

Natfoods chairman Todd Moyo said the influx of imported food commodities following the acute shortages that hit the country after the 2007 arbitrary price controls is curtailing growth for the local industry.
He said government should protect local industry from competition.
Following the June 2007 price blitz at the height of runaway inflation, local manufacturers scaled down operations and government introduced the waiver which expires in June.
“In the interim, cheap imports have proliferated in the domestic market and this is having a negative impact on the economic viability of local manufacturers,” Moyo said in a statement attached to the results.
“Unless the local manufacturers have the benefit of some form of price protection from cheap imports, the appetite for investment to resuscitate their facilities will remain limited and this is likely to have further impact on the possible revival of the domestic primary agricultural capacity.”
The oils and meals division, the company’s flagship, recorded poor performance owing to frequent power outages, plant breakdowns and a regional stock-out of inputs.
Stock feeds sales, according to Moyo, recorded a “pleasing 142%” rise buoyed by a “strategy of low margin and high quality”.
Local self raising flower which generally costs $1 more than imported brands recorded a 13% rise on the second half of the previous financial year. Zimbabwe’s supermarkets are well stocked with basic commodities from South Africa, Pakistan and Zambia.
The National Foods chairman attributed the relatively costly local brands to unviable interest rates being charged by local banks notwithstanding an increase on bank deposits. Local banks are charging an average of 7% interest rate.
Credit to the private sector by banks according to Reserve Bank statistics was US$546,7 million in October 2009 representing a loan to deposits ratio of 55,1% up from 35% in January 2009.
Broad money supply, according to the central bank Monetary Policy Statement presented in January, grew from USD 297.6 million in January 2009 to US$991,7 million.
“Despite the bank market deposits increasing, liquidity remained tight and short term lending rates remained excessively priced. Long term loans or lease hire facilities were not available to finance plant rehabilitation,” Moyo said.

 

Bernard Mpofu