MOST local bakers are struggling to remain in business due to critical foreign currency shortages which have resulted in job cuts and serious financial losses, NewZimbabwe.com Business has learnt.
Industry sources, speaking on condition they were not named, said the Reserve Bank of Zimbabwe (RBZ) has failed to fulfill recent promises to provide the sector with foreign currency for key imports.
“When the sector proposed to increase bread prices by over 100 percent, government chipped in and blocked the price hikes, promising that they were going to avail 80 percent foreign currency on all the costs incurred by bakers.
“However, three weeks later, the Reserve Bank of Zimbabwe (RBZ) has not honored its promise and this is now affecting the already troubled bakers,” said the source.
National Bakers Association of Zimbabwe president Ngoni Mazango declined to take the questions saying he was busy while Industry and Commerce Minister Mangaliso Ndlovu’s phone also went unanswered.
However, Bakery Industry Workers Union deputy secretary general Munyaradzi Shanga said all was not well in the sector.
“Companies are struggling to get enough flour to meet their expected capacity levels,” he said.
“So, it’s costly according to them to get supplements from neighboring countries because that would require forex which is difficult to access from the RBZ.
“Furthermore, other pre-mixes and packaging material are also costly thereby increasing operational costs and making it almost impossible to break even under the circumstances.”
Shanga added; “As a result, many bakeries are most likely to close particularly small players.
“In some instances, employees have either been laid off, retrenched or placed on short term work while the few who are still in employment are pushing for salary increments.”
Business leaders who met the industry minister on Monday also have expressed concern over the manner in which foreign currency is being allocated by the RBZ.