Journal of Harmonized Research in Management

THE EFFECTS OF THE MULTI-CURRENCY SYSTEM ON THE PERFORMANCE OF THE MANUFACTURING SECTOR IN ZIMBABWE

Abstract

Author(s): Naison Manda, Vusumuzi Sibanda

This study examined the impact of MCR on the performance of the manufacturing sector in Zimbabwe. The study adopted a survey design in which a mixed methods approach was used to collect both quantitative and qualitative data. The population for this study comprised of 38 manufacturing companies in Zimbabwe listed on the Zimbabwe Stock Exchange (ZSE) and are members of the Confederation of Zimbabwe Industries (CZI). Stratified random sampling was used to select 160 participants in 10 manufacturing companies in Harare. Data from the respondents in the manufacturing companies was collected using questionnaires. The study also sought the opinions of five key stakeholders from the Ministry of Finance, Ministry of Industry and Trade, Reserve Bank of Zimbabwe, Confederation of Zimbabwe Industry and Bankers Association of Zimbabwe in order to consolidate the study and data were collected using interviews. The study found out that the use of the MCR in the Zimbabwean economy resulted in the loss of control over Monetary Policy and the ‘market’ had since dictated and adopted the US Dollar as the major transacting currency resulting in massive capital flight. The study further showed that a number of changes were necessary in manufacturing companies, which include change of management and having new ideas, investment in human resources through training, and acquisition of new machinery. The study recommends the reintroduction of the Zimbabwean local currency and placing of embargos against importation of certain goods to boost local production. Furthermore, manufacturing companies need to invest in research and development and come up with new, unique products.