Indians mull barter to ease forex woes

The Indian business community has proposed the use of barter trade with their Zimbabwean counterparts, to ease the foreign exchange crisis bedevilling the economy.
In an interview on the sidelines of the CBZ International SME Indaba held in Bulawayo recently, head of the Indian delegation representing businesses, Rajshekhar Ray, proposed the use of barter trade as a way of eliminating the foreign exchange crisis.


“One of the solutions is, for example, we are trying to work on a barter system. A barter … meaning if I provide you machinery over here, let’s say I supply over a $1 million machinery, instead of taking cash I may take out something from Zimbabwe that is required in my country that Zimbabwe is producing in abundance, at a very competitive price,” he said.

“So that is how one of the ways we can eliminate the foreign exchange crisis, because it’s simple $1 million of machinery, so the Zimbabwean company is able to generate more money using those machinery.”

Zimbabwe is facing a foreign currency crisis, with companies struggling to import raw materials.

Ray said some of the things they were eyeing for barter exchange were food stuffs and from textiles.

“Let’s say food stuff, Zimbabwe is good in exporting tobacco. We are looking at the textile industry of Zimbabwe, where right now currently 70% of Zimbabwe’s cotton is being exported. Now we are trying to do the value-add of that in excess because it was being done 30 years ago, you had a very vibrant textile industry,” he said. ads Ads

Ray said the business community was positive that change is already happening in Zimbabwe and their role was to keep going “irrespective, which government is there because for us, it’s about livelihood”

Ray, a Fabtech Technologies International Ltd official, said he was personally “a very big ambassador for Zimbabwe in my country, business community, because I have seen the opportunity”.

“I came here as a 10 year-old, the first time I landed in Zimbabwe it was just after independence, so it’s just sometimes destiny has different things for different nations but it’s about leadership at the end of the day”

Zimbabwe is currently facing foreign exchange crisis which has seen local companies struggling with repatriating dividends to foreign shareholders.

Local financial institutions have been battling to meet foreign payment obligations on the back of low nostro balances, as foreign currency shortages in the country persist. As a result, businesses, especially manufacturers and mines, have been struggling to make foreign payments.

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  1. Is it anything new to Zimbabwe. while it can easy on forex, the major risk to watch for is the shortchange that always have a bearing on Zimbabwe not the other part

  2. Who comes up with this stuff? The credentials of the people who lead should be questioned. Money was invented to correct the ills of barter trading, and you are reintroducing the same problems into an already volatile situation.Instead of looking into the future of money, others go backwards.
    Barter trading is never fair, someone will always feel cheated which they are. Wanting something doesn’t necessarily mean it has the same value as what you are getting. Money made it possible to assign value to objects that were difficult to exchange.Here came an object in which its value was agreed upon, its value didn’t lie with the material it was made from but by the word of the issuer who could be trusted.
    The Zimbabwean situation is the problem with the issuer, people don’t trust them, their words mean nothing.
    Please rethink this strategy…or better yet revisit Economics 101

  3. I dont think that engaging in barter trade with India will benefit Zimbabwe, but will only benefit India because if we look closely India will be exporting finished products to Zimbabwe such as machinery and equipment whilst Zimbabwe will be exporting unprocessed goods such as agricultural products. India will add value to agricultural imports from Zimbabwe, hence doubling their income and create jobs in their country. Zimbabwe will gain less because it will be importing finished products from India.

    Kunguma Victor: Economist

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