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Paint shortage looms

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  • Paint shortage looms

    Hi Guys

    Problems in Zimbabwe.

    Paint shortage looms

    Audrey Chitsika
    8/4/2005 8:05:56 AM (GMT +2)

    ZIMBABWE - on the threshold of a massive housing programme to accommodate victims of its infamous clean-up campaign - might experience a critical shortage of paint soon because of inadequate foreign currency to import raw materials.

    Industry experts say the yawning foreign exchange gap, worsened by the drought as the government had to divert resources to avert starvation, also threatens the survival of manufacturers and distributors of paint.
    They warned that persistent foreign exchange shortages might delay the recovery of the construction sector, which has also been weighed down by relentless increases in prices of building materials such as cement, bricks and sand.
    Unconfirmed estimates suggest that paint production has suffered a 10 percent dip since the beginning of the year as the industry battles to secure imported raw materials. At least 60 percent of the raw materials are imported.
    Mac Mazimbe, a director of Astra Paints, told The Property Gazette this week that it had been difficult for the industry to get sufficient foreign currency allocations from the central bank.
    "The foreign currency we are getting from the auction is not enough. The challenge lies in increasing our export performance," he said.
    The country has been experiencing an acute shortage of foreign currency since the International Monetary Fund (IMF) withdrew balance of payments support in the late 1990s. Donors, taking a cue from the fund, have also been giving Zimbabwe a wide berth.
    The shortage of foreign currency has been worsened by poor export performance, which has seen the central bank revising downwards its export earnings forecast.
    Zimbabwe is currently scrounging around for rescue packages from neighbouring South Africa, Namibia and other "friendly" Asian states such as China and Malaysia to pay off arrears to the IMF and escape expulsion from the 184-member financial institution.
    Charles Nandu, the managing director of Alka Paints, said companies were being forced to negotiate extended repayment periods with foreign suppliers of raw materials to give themselves sufficient time to raise the foreign exchange at the auction and keep their production lines running.
    Highlighting the panic gripping the industry, Nandu said: "Some of our executives resigned from the company last year thinking that it was going to face closure due to the shortage of raw materials to manufacture paint."
    Executives from Chroma Paints and Dulux Limited, some of the country's major players, also confirmed the difficulties in the industry, amid fears these may derail recently announced government programmes.
    Faced with an estimated 700 000 people affected by its controversial clean-up campaign, the government has announced a $3 trillion construction programme codenamed Operation Garikai/Hlalani Kuhle to create accommodation for those affected by the nationwide blitz on slums.
    Parallel to the programme, widely seen as an afterthought following international condemnation, the central bank is also rolling out massive housing schemes under its Homelink initiative.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx