$45m Nostro account backlog hampers bakers

Baker’s Inn chief executive officer Mr Ngoni Mazango (left) leads a tour of Leonard Plant 3 after its official opening in Bulawayo last Friday

Baker’s Inn chief executive officer Mr Ngoni Mazango (left) leads a tour of Leonard Plant 3 after its official opening in Bulawayo last Friday

Oliver Kazunga, Senior Business Reporter
THE National Bakers’ Association of Zimbabwe (NBAZ) has appealed to the Reserve Bank to clear over $45 million in Nostro account balances to ensure the bakers import raw materials on time.

Since last year, the local manufacturing sector through organisations such as the Confederation of Zimbabwe Industries has raised concern over delays in the processing of outgoing payments for the procurement of raw materials.

In an interview after the commissioning of a $1.5 million third production line at Baker’s Inn factory in Bulawayo last Friday, NBAZ president Mr Ngoni Mazango who is also the company’s chief executive officer said:

“The last time I checked with the Reserve Bank of Zimbabwe, I was told both the bakers and millers had a backlog of $45 million in Nostro account balances that were yet to be settled.

“That is impacting negatively on our members as they are facing delays in importing critical raw materials.”

He said due to low capacity utilisation by local industries that supply them with raw materials, bakers were importing critical inputs such as fats, flour and clips used in tying bread packaging material.

“Three months ago, I was informed that both the bakers and millers received more than $8 million towards the clearance of that deficit ($45 million Nostro account balance), but on monthly basis we are not receiving the $16 million that the bakers and millers require to support our industry.

“This means that we now have more than $45 million Nostro account backlog that has to be cleared for us to import raw materials on time,” said Mr Mazango.

The NBAZ president said they have since written to the RBZ appealing for the clearance of the Nostro account backlog.

“We have actually written to the authorities to look at the bakery industry because we are an essential service provider,” he said.

Presenting the 2017 mid-term monetary policy statement early this month, RBZ Governor Dr John Mangudya said they have negotiated for an enhanced Nostro stabilisation facility of $600 million from Africa Export-Import Bank to manage the cyclical nature of Zimbabwe’s foreign exchange receipts.

“This facility shall be available for drawdown after the closure of the tobacco selling season by the end of August 2017.

“Together with the efficient foreign exchange measure, this Nostro stabilisation facility shall ensure that the revival of firms is strengthened and that critical  imports of fuel and electricity are assured,” he said.

Dr Mangudya said to ensure efficient utilisation of foreign exchange, the Nostro stabilisation facility would be supported by a continuous stream of export receipts. — @okazunga

Article Source: The Chronicle