Import ban of 2016 backfired and caused forex shortages: Mangudya

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said that the shortage of foreign currency was partly caused by the ban on the importation of basic goods. Last year the government banned the importing of at least 100 basic goods when it introduced Statutory Instrument 64 of 2016.  He said the ban had led to the revival of local industries which were now importing a lot of materials using foreign currency.  Mangudya said this while addressing retailers in the capital on Tuesday:

We now have a challenge that SI 64 was a wholesale for all companies to start producing and they have religiously done so. We did stock taking and realised that almost 400 companies have resuscitated their operations because of the SI 64, but these 400 companies now need feedstock because their import content is very high, on average 50 percent.

[This has] created demand for foreign currency which was not there before SI 64. Banks now have competing needs as people are now importing raw materials, which is good for the economy.

More: Financial Gazette

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