Dollarisation’ makes it easier to do business in Zimbabwe than SA

An absence of exchange controls as a result of the dollarisation of the Zimbabwean currency means that it is easier in many ways to transact business in Zimbabwe than neighbouring countries like South Africa, says Sheila Mashiri, managing director of Allen Wack and Shepherd Global Freight (AWS) in Harare. “Because we do not have your stringent exchange controls, we can pay suppliers, transporters and agents immediately on proof of import. “As long as there is money in the account, we can pay. Previously one waited for three or four months to obtain permission to make payment. “That led to problems where we could not pay the foreign forwarders on time, and that led to some demanding prepayment when doing business with Zimbabwe. That has all changed,” she says. Being resourceful, Zimbabwean freight forwarders have also learned that they should not rely on just one bank. “We use the bank that is best able to serve a particular market. So, for example, we have different banks for dealing with companies in China, India and South Africa. “The objective is to conclude the transactions quickly in order to avoid incurring demurrage and other costs,” she says. Because of the complexities of the different customs systems, AWS works through agents specialised in each of the markets and types of cargo. This strategy frees up the company to focus on its core business, which is freight forwarding and warehousing. “That is our strength, because you need a world-wide network to provide professional and cost-effective freight forwarding services,” she says. Mashiri has experience of foreign exchange regulations in both South Africa and Zimbabwe – AWS has offices and facilities in Gauteng. The company handles Zimbabwean exports of cotton, cotton seed, chrome and timber. Imports include fast moving consumer goods, dry goods, spares, vehicles and bulk lubricating oil. AWS handles the distribution of the oil on behalf of its client, with the client’s customers collecting supplies from the AWS warehouse. There is so much demand for warehousing that AWS has expanded its operations. The mix is, however, constantly changing. Regulations banning the importation of right-hand-drive vehicles, and second-hand vehicles older than five years have affected volumes. Demand has also dropped off for some basic consumer goods as the Zimbabwean government has re-introduced import tariffs to protect the local industry. Things change quickly, however, as Zimbabwean manufacturers of soap and oil have come under fire for exploiting the situation and raising their prices. By the time this is printed, government may have delivered on its promise to lift the duties in order to protect Zimbabwean consumers.