According to Charles Msipa, Managing Director of Schweppes Zimbabwe Limited (SZL), the rapid dollarization of Zimbabwe’s economy is likely to lead to an increase in imports and a decline in local industry competitiveness. This was also the case from 2010 to 2016 when various consumer products were imported from Zambia, Mozambique, Malawi, and South Africa.
Adequate Stocks of Juice to Meet Demand
Despite the influx of imported goods, SZL has enough stocks of juice to meet the demand for both the local and export markets. SZL is currently exporting 10% of their Mazoe cordial output to Botswana and South Africa, and Msipa states that as the economy continues to dollarize, they will see an influx of imported consumer products from regional markets.
Market Liberalization and Dollarization
In 2009, Zimbabwe first adopted the US dollar as its currency, and local retailers imported goods mainly from South Africa. The government allowed for the duty-free importation of some goods as a way to improve access to affordable basic commodities. This created an opportunity for regional industrial enterprises to enter the Zimbabwean market in search of the US dollar.
Decline in Industry Capacity Utilization
Industry analysts predict that industry capacity utilization, which is now at a 10-year high level of roughly 60%, will further decline as a result of market liberalization and the dollarization of the economy.
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