ICT bears brunt of Zimbabwe economic bottlenecks

February 21, 2020 • Breaking, Business Intelligence, Cloud Computing, Companies, Editors Note, Enterprise Solution, Exclusive, Featured, Finance and Banking, News, Software, Technology, Virtual Reality

HARARE, (ItNews Zimbabwe) THE information and telecommunications (ICT) industry ought to be among the most profitable and fastest-growing sectors globally.

However, an executive has given insight into how operating in the sector is an ordeal in Zimbabwe amid the country’s foreign currency challenges and unviable payment terms from Government institutions.

Patrick Mutesva, the managing director of Trickmut Computers, narrated the challenges in a recent interview with ItNews Zimbabwe in the capital Harare.

The company is one of the leading suppliers of laptop computers and related accessories such as catridges, WiFi routers, tablets, mobile phones, printers and projectors.

“The ICT industry is the in-thing right now all over the world but it comes with challenges for us here in Zimbabwe,” Mutesva said.

The products his company trades in are foreign-sourced, mostly from Dubai, United Arab Emirates (UAE) where they are cheaper and the cost of travel is lower.

This drives the constant need for foreign currency to fulfill orders.

“The issue of foreign currency is teething,” Mutesva said.

“We (Trickmut Computers) have an FCA (Foreign Currency Account/Nostro) but when we have orders we have to apply to the Reserve Bank of Zimbabwe (RBZ) to get an allocation to fulfill our orders.”

The executive added, “Now, the RBZ takes its time because they have processes that follow and it may take maybe three days or more. In essence that means, an order today delivered after seven days to a customer, leaves me with no profit.”

After grappling with forex issues at the RBZ, Trickmut has to struggle longer payment terms.

“Most Government institutions pay after 30 days and in local currency, yet one sources the products in foreign currency. By that time, inflation would have eroded the profits and we are left with zero,” Mutesva lamented.

“Our appeal is that Government reduces periods of payment to at least seven days,” the Harare businessman told ItNews Zimbabwe.

After bringing products from Dubai, another hurdle for the company comes in the form of the Zimbabwe Revenue Authority (ZIMRA), who charge in local currency, the ZWL$.

“They (ZIMRA) charge in local currency but using the rate of the day from the RBZ (central bank). Now you would have given a customer a certain quotation, then wait for forex from RBZ for three days. By the time you return to deliver the order, your profits would have been eroded because the exchange rate would have changed,” Mutesva explained.

He appealed, “So if these processes can be expedited the better for us, but then again RBZ has their own way of doing things.”

Business seems easier when dealing with non-government organisations (NGOs).

“When it comes to NGOs we are better off because they are allowed to pay in foreign currency. We also have schools, colleges and universities that we also deal with because the future is in ICT,” Mutesva said.

In the midst of the above bottlenecks, there has been little in terms of inventions despite the creation of Innovation Hubs at the government-run institutions comprising the University of Zimbabwe (UZ), Midlands State University (MSU), the National University of Technology (NUST), Chinhoyi University of Technology (CUT) and Harare Institute of Technology (HIT).

During the interview with ItNews Zimbabwe, Mutesva was preparing to fly out for another business trip in Dubai, apparently in continuation of a vicious cycle operating in Zimbabwe’s ICT sector.

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