Firms in Forex challenges: RBZ battles long foreign payment queues
Prosper Ndlovu, Business Editor
PROCUREMENT of imported raw materials and capital equipment has become a nightmare for most companies as the Reserve Bank of Zimbabwe (RBZ) battles long foreign payment queues, an official has said.
Zimbabwe Revenue Authority (Zimra) board chair Mrs Willia Bonyongwe revealed this yesterday in the tax authority’s revenue performance report for the first quarter ended 31 March 2017.
She acknowledged the difficult macro-economic environment that has seen industry operations being hampered by delays in foreign payments due to the tight liquidity situation in the economy and biting cash shortages.
The beginning of the tobacco marketing season mid-last month as well as the implementation of Statutory Instrument 64 of 2016, which restricts importation of locally manufactured products, have not eased the crisis as much as anticipated, despite improvement in product quality and volume of sales, she aid.
“Unfortunately the liquidity situation worsened again during the first quarter of 2017. Procurement of imported raw materials and capital equipment has become a nightmare and there are long foreign payment queues at the Reserve Bank of Zimbabwe, eating into the gains of S.I.64 of 2016,” she said.
“Regional currencies continue to weaken against stronger United States dollar, thus worsening Zimbabwe’s export competitiveness.”
Mrs Bonyongwe, however, said the responsibility to address the liquidity situation does not lie with the RBZ alone but was the duty of all Zimbabweans.
“It is the duty of everyone to act responsibly and in the national interest in how cash is handled for the country to restore stability in this area,” she said.
The apex bank has blamed illicit cash dealings such as money laundering and externalisation for haemorrhaging foreign exchange from the economy.
Resistance to use of plastic money has also compounded the situation as more depositors continue to demand cash evidenced by continued queues at banks.
Mrs Bonyongwe also bemoaned the resurgence of inflation, which is rising fast with the year on year rate breaking into the positive zone for the first time in 29 months. Inflation, according to Zimstat, gained 0.71 percentage points in January this year from -0.65 percent to 0.06 percent in February 2017.
“This trend is very dangerous given that the dominant currency is the US dollar, which is currently strengthening. Therefore, having the US dollar as the dominant currency worsens our export competitiveness.
“Under the circumstances, the only solution to the liquidity crisis is increasing production and exports to earn foreign currency,” said Mrs Bonyongwe.
She, however, reiterated that prospects looked brighter for the country’s economy with growth projections of 3.7 percent this year from the initial 1.7 percent. President Mugabe has said more economic gains would be registered this year following the good rains and anticipated bumper harvest.
Meanwhile, Zimra has surpassed its first quarter revenue collections by 6.09 percent to $862.47 million from the targeted $812.94 million.
During the period the authority’s net revenue grew 14 percent from $724 million in the same period last year. Mrs Bonyongwe attributed the growth to revenue enhancement measures such as automation, greater enforcement and the fight against corruption.
She said the bulk of revenue was derived from VAT on local sales (22.42pct), individual tax (20.05pct) and excise duty (18.17pct). Company tax contributed 11.20pct while the rest of the revenue heads contributed 28.16 percent.