Arenel gets SEZs status

ONE of Bulawayo’s top companies, Arenel Private Limited, has been granted a special economic zone (SEZ) status, a decision meant to add impetus to the firm’s production efficiencies.

A SEZ is an area in a country that is subject to unique regulations that differ from other areas in the same country as its regulations tend to be conducive to attracting Foreign Direct Investment.

Through the SEZ status, Arenel has now been granted an authorised economic operator licence, which enables it to enjoy special treatment at ports of entry.

A senior company official, Mr Stephen Ncube, revealed this during a briefing after a tour of the company’s factory and Turnall Holdings Limited by the Minister of State for Bulawayo Provincial Affairs and Devolution, Judith Ncube, and members of the local Joint Operations Command (Joc) on Friday.

“The Government is supporting us in various ways and the other support that we got from the Government is that we got the Special Economic Zones status and just recently we also got an authorised economic operator,” said Mr Ncube.

“In other words, what it means is if our trucks go to South Africa with our products, when they come back, they come with a truck-load of raw materials.

“So, whenever they are crossing the border, we are no longer queuing on the Zimbabwe side. Our trucks don’t queue because they have got a special treatment and special lane that they use at the border and aren’t subjected to searching.”

The authorised economic operator licence was granted by the Government through the Zimbabwe Revenue Authority (Zimra). The licence also benefits Arenel in that the manufacturing concern gets release from customs control with minimal declaration, as well as filing electronic declaration.

Mr Ncube said the Government was also negotiating with South Africa to accept the authorised economic operator status while Zimbabwe also reciprocates when that neighbouring country’s suppliers come in.

He said despite Arenel’s improved operational capacity, it was grappling with challenges such as accessing import permits from the Ministry of Agriculture.

“The other challenge that we are facing is for us to get import permits from the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement,” said Mr Ncube.

“But in terms of the Zida (Zimbabwe Investment and Development Agency) Act, if you are in a SEZ, you are exempted from the requirement to obtain the import permits and licencing.”

Arenel has, too, been facing challenges in accessing foreign currency from the Reserve Bank of Zimbabwe weekly Forex Auction Trading system.

“We have been participating on the auction system of late. I would say probably in July, up to last week, all our bids that we placed have been successful, but we have not received the funds and this has been affecting our operations,” said the company accountant, Mr Handsome Ncube.

He said a majority of their bids have allocations reduced to about 30 percent of initial requirement. Early last month, Finance and Economic Development Secretary, Mr George Guvamatanga, announced that the Government through RBZ intends to clear the foreign currency backlog at the auction system within a month-and-a half.


The forex backlog is around US$200 million. In its first quarter Business and Economic Intelligence Report, the Confederation of Zimbabwe Industries revealed that the existence of a forex backlog at the auction system creates a possibility of sourcing hard currency on the parallel market.

This renders some locally-produced products uncompetitive in the market as manufacturing firms would have bought the forex at premiums far above the official exchange rate, which was pegged at 86 against the United States dollar.

Mr Ncube said the obtaining forex situation at the official market has also strained their cash flows because they were largely importing critical raw materials from South Africa. “We are also in good relationship with our suppliers where they have also been giving us some lines of credit, but because of our failure to pay on time, some of them have cut the lines of credit,” he said.

Through the banking sector, Mr Ncube said, they have tried engaging RBZ and the monetary authority has promised that the forex backlog would be cleared by the end of September.

He said Arenel was currently exporting in the region but the manufacturing company could not sustain the exports due to foreign currency challenges.

Minister Ncube commended Arenel and other firms in Bulawayo for their efforts in maintaining the industrial agenda alive in the city.

She said the Government and the private sector were taking a single step at a time in bid to restore the economy to its former glory.

“We are prepared to take a single step and this is what you are doing as a company.

“We have some challenges as a country and you are not spared as a company, all of us have those challenges in one way or the other. But we are saying let’s keep on moving forward as you are doing,” she said. — The Chronicle

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