Grain Millers Association of Zimbabwe chairperson, Tafadzwa Musarara

GRAIN Millers Association of Zimbabwe (GMAZ) members still owe foreign suppliers over US$34,7 million for wheat imported during the 2016 season due to foreign payment challenges in the country.
According to a fresh court application by the organisation at the High Court against a mandatory food fortification programme introduced by government, GMAZ chairman, Tafadzwa Musarara, said the situation highlighted the lack of capacity by industry players to increase import obligations through the food fortification programme.
“As matters stand, more than US$34,7 million is required by members of the association to pay for the wheat imported in the 2016 season. Whilst applicant’s members have the necessary bank balances to pay the sum outstanding, the relevant nostro currency has simply not been obtained,” Musarara said in the application.
Musarara told The Financial Gazette that despite a US$600 million nostro stabilisation facility being made available to the Reserve Bank of Zimbabwe (RBZ) by the African Export and Import Bank to fund exports, millers were still in arrears.
“Yes, that figure is correct and nothing has been disbursed to date… Of course, this may lead to wheat shortages as relations with suppliers are now strained over the matter. However, we hope it does not get to this,” he said.
Local businesses are failing to secure key raw materials from foreign countries because of foreign currency shortages.
In the wake of cash shortages, banks have been unable to meet local as well as foreign account demand, a situation that has been worsened by the country’s import restrictions, putting more pressure on local firms.
Due to liquidity challenges, the RBZ last year came up with a payment priority list ranking essential imports like fuel above raw materials for local manufacturers.
While the central bank has started drawing down on the Afreximbank facility, the country still has a foreign payments backlog estimated at over US$300 million.
This has seen market watchers warning of impending shortages.
While the country is yet to experience significant shortages, there have been reports of essential imports like car spares disappearing from the market.
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