Finance minister pledges to tackle capital flight

BY FIDELITY MHLANGA

FINANCE minister Mthuli Ncube on Monday pledged to support food and beverage manufacturer, Nestle Private Limited, as government desperately tries to contain capital flight.

A large number of companies are experiencing viability problems due to scarce foreign currency to source raw materials and machinery and are on the verge of collapse, while some have already suspended operations.

Singapore-domiciled cooking oil manufacturer, Surface Wilmar last month discontinued operations as a result of foreign exchange shortages.

“I want to understand the acuteness of the foreign currency shortage that they require. I am also keen to understand the backward linkages that these companies have for the rest of the economy. The backward linkages they have with other companies in the packaging sector such as Hunyani and others. These are very critical. So if you don’t assist Nestle, their suppliers, such as Hunyani will also be under pressure. It cascades right through the value chain,” he said during a tour of the Nestle plant.

Last week, Hunyani’s parent company, NamPak said It was struggling to access foreign exchange to purchase materials and to make matters worse shareholders have cut external financial support due to non-payment of debts.

Several listed companies are battling to pay their foreign shareholders dividends due to the prevailing foreign currency crisis.

“We also want to assess the impact of our policies, how they impact companies like Nestle. Remember this is a foreign investor. It was founded 150 years ago. This is foreign direct investment. As government we want to appreciate the impact of our policies. We want to make sure that they invest some more, but also create more jobs and also that they stay here and they don’t migrate to other countries and other regions,” Ncube said.

Government is on a charm offensive drive to attract and retain investment in the country through its mantra “Zimbabwe is open for business” which, however, has not been followed through with an appropriate enabling operating environment.

Currently, the operating environment is over-burdened by currency distortions, policy inconsistency and sovereign risk associated with the country.

5 Comments

  1. thank you ntuli you are the point man for this job not a known lawyer cum economist who wants to claim to know all in your field we say no to this opposition political figure, he mus focus on his dirty politics whilst you do your best in resurrecting the economy as you are schooled in that field

    1. @ Elisha
      can`t you comment about Ncube`s policies without calling names on opposition legislators? after all the one yu are calling names was successful during his tenure and even RG once singled him out as the best finance minister he has ever worked with. so please stop being too political and comment on the economy if you know about it kwete kungoisa politics pese pese.

      1. we got nowhere and not even a single company opened during that period save for the country using the usd and infact what has riled many is the fuelling of blacked market rates by uttering misleading information of a new currency when someone is not in government so how can this escape condemnation from the general public

  2. Thank you, Mthuli for your sacrifice to work for Zimbabwe at this critical moment. You are super patriotic. You could have remained outside Zimbabwe enjoying the benefits of being a global lecturer of repute or could have easily joined global development institutions with a very good salary and perks, but you decided to come home. We can only wish you the very best and we hope your efforts will not be in vain. Forever respected!!

    1. In Zimbabwe he is earning far more than he was earning from lecturing abroad. So many perks for Zim ministers

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