Impact of the Multi-currency System on the Manufacturing Sector in Zimbabwe

  • Judias Sai University of Zimbabwe
  • Alice Zinyemba University of Zimbabwe

Abstract

The introduction of the multi-currency system in February 2009, in which a number of foreign currencies were adopted for use as legal tender, was meant to rein in devastating hyperinflation that had beset the Zimbabwean economy since 2000. The purpose of this study was to determine the impact of the multi-currency system on the manufacturing firms in Zimbabwe. The study used a quantitative approach and a questionnaire was used to collect data from 50 respondents out of a sample of 100 from 25 manufacturing firms. This sample was conveniently selected. The response rate of 50%, was adequate to give the desired study results. The study found a number of major benefits from the multi-currency system to the manufacturing sector. These included the stabilisation of prices, elimination of hyperinflation and fall of interest rates. Consequently, the firms were able to properly plan and budget for their operations. Other benefits included improved availability of raw materials, ability to increase capacity utilisation and increase in sales and profitability. The sector preferred the continued use of the multi-currency system, particularly the United States dollar, to the re- introduction of the Zimbabwean dollar. The study recommends that the government of Zimbabwe should continuously reassure the nation that the multi-currency system will not be removed too soon. The manufacturing sector should also engage government to encourage foreign direct investment (FDI) in order to improve liquidity, which is critical for the sector’s survival.

Author Biographies

Judias Sai, University of Zimbabwe

Mr. Judias Peter Sai is a lecturer at the University of Zimbabwe for 8 years now. He is also a PhD Candidate and holds a Masters’ in Business Administration as well as Bachelor of Business Studies, Honours. Mr. Sai is a Fellow of the Institute of Chartered Secretaries and Administrators (FCIS). He has published 7 articles in various journals in the use of energy in the tourism and hospitality industry, management development, micro, small and medium size enterprises, impact of the multicurrency system on various industrial sectors in Zimbabwe and public-private partnerships in the tourism sector in Zimbabwe. His major areas of research interest include: financial management, small and medium enterprises and project management.

Alice Zinyemba, University of Zimbabwe

A well published scholar, Dr Alice Zinyemba is a senior lecturer and chairperson of the Business Studies Department in the Faculty of Commerce at the University of Zimbabwe. She is a trained Organizational Development Consultant with more than 15 years of consulting experience in that field and was awarded Woman Consultant of the Year (2005) by the then Association of Zimbabwe Consultants . She was also awarded a certificate of recognition in the entrepreneur category by the Zimbabwe Independent (Amalgamated Holdings) in 2013.

Published
2017-06-30
How to Cite
SAI, Judias; ZINYEMBA, Alice. Impact of the Multi-currency System on the Manufacturing Sector in Zimbabwe. The Fountain: Journal of Interdisciplinary Studies, [S.l.], v. 1, n. 1, p. 148-171, june 2017. ISSN 2520-453X. Available at: <http://journals.cuz.ac.zw/index.php/fountain/article/view/40>. Date accessed: 26 sep. 2017.