7 March 2018

Zimbabwe: Forex Shortage Chokes Cafca

Zimbabwe's leading cable and allied manufacturer, CAFCA is battling to raise US$4 million in cash to replace its ageing equipment and procure of raw materials to fully take advantage of the government's local industry protection policies against imports, Group Chairperson, Piniel Mukushi has said.

According to Mukushi, the group's profit before tax for the year ended 2017 increased by 81% while the turnover increased by 6.4%.

"The strategy to reduce costs to be in line with reduced demand for the company's products have been a success with profit before tax increasing by 81% despite turnover only increasing by 6.4%," said Mukushi.

He added that protection period meant to allow CAFCA to improve its competitiveness requires foreign currency for them to procure raw materials purchased outside the country.

"The company has been given a period of protection from imports to allow it to improve competitiveness.

"Foreign currency will, therefore, become key for obtaining both capital equipment and replenishing raw materials," said Mukushi.

He said the solution to raising foreign currency requires working closely with other stakeholders including the central bank and mining sector players among others.

"We thus need to work closely with the Reserve Bank of Zimbabwe, our mining sector, mining sector customers and generate exports to secure foreign exchange.

"Our barter deal with ZESA, therefore, remains key as this remains a significant foreign currency required to import copper.

"We appreciate the support shown by the Ministry of Industry and Commerce for local manufacturers by giving us this period of protection against imports," said Mukushi.

CAFCA manufactures and supplies cable and allied products for the transmission and distribution of electronic energy and information primarily in Southern and Central Africa. It offers a toll manufacturing option to all its customers who can access key raw materials such as copper and aluminum, which are converted at the cost of value addition.

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