The end of the road for Zimbabwe
According to S&V magazine, South Africa, the leather, footwear and leathergoods industries in Zimbabwe, who have survived against great odds thus far, may now be at the end of the road. The final straw came when the government decreed that all prices had to be cut to match prices on June 18.
All manufacturers and retailers are expected to keep trading until stocks are exhausted, or face nationalisation. The government has also banned businesses from using prevailing exchange rates on the 'parallel market' when costing purchases (Z$200,000 to the US dollar at the time). They are insisting on the official exchange rate of Z$250 to the dollar.
One manager said: 'Everything used in manufacturing has some imported component. Right now, manufacturers and retailers are losing money on every single pair they sell and the same is true of tanneries selling leather. Some companies are having to borrow money to pay wages.
He said it was estimated that manufacturers had raw materials to last for 6-8 weeks from when the crackdown started. 'Some companies have already run out of some inputs like chemicals and for almost all manufacturers, all stocks will run out at the end of August.' Then, unless they receive foreign exchange, through the commercial banks, or at the official rate, they'll have to stop production.
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