The Sunday Mail
Livingstone Marufu
OVER 81 000 tobacco farmers will get at least US$21,7 million in bond note export incentives this month as part of the central bank’s efforts to stimulate exports and production in Zimbabwe. Government is finalising introduction of bond notes as an export incentive to promote and encourage exports.The Reserve Bank of Zimbabwe is expected to introduce bond notes in the coming weeks, offering an incentive of between 2,5 and five percent on all exports, with farmers and artisanal miners likely to be the biggest beneficiaries.
Around 68 519 small-scale tobacco farmers will get a five percent bonus from earnings backdated to May 2016, while 13 282 large-scale tobacco farmers will be paid a 2,5 percent gratuity. According to the RBZ, small-scale tobacco farmers will get about US$13,7 million incentive for the US$274,2 million worth of tobacco delivered last season.
Large scale tobacco farmers will pocket at least US$8 million on top of US$321,6 million paid for tobacco in the just ended selling season. Deputy RBZ Governor Dr Kupukile Mlambo told The Sunday Mail last week said it was easy to incentivise tobacco farmers because of the availability of a clear database.
“We are already talking to the banks right now to look at the deliveries that the tobacco farmers made to the auction floors, particularly small scale farmers. “That is the reason why we asked them to open accounts so that they can receive their export bonus through their respective banks and as we speak the (RBZ) governor (Dr John Mangudya) and the Finance and Economic Development Minister Patrick Chinamasa have already received the information concerning the farmers’ bond notes incentives.
“All those incentives are accruing and as soon as the bond notes are available we will start rolling them out to farmers depending on the amount of deliveries made to the auction floors,” said Dr Mlambo.
Dr Mlambo said bond notes would also ease pressure on nostro accounts, which are bank accounts held in foreign countries by domestic banks, mainly to facilitate settlement of exchange and trade transactions.
“We use nostro accounts to pay for imports, but due to the fact that our balance of payment is in the negative, we had to devise a mechanism in the form of bond notes to improve our nostro accounts with view to improve our exports,” Dr Mlambo.
“Our main source of liquidity is through these exports, without them, the cash shortages will persist hence we are coming up with these measures to improve exports. By so doing, we reduce pressure on the nostro accounts. Bond notes cannot be externalised so through bond notes, we hope to have a facility that will stabilise nostros.”
Dr Mangudya reiterated his deputy’s sentiments that very few bond notes will be in the market to allow for activities such as “cash burning”.
“We have repeatedly said bond notes are not coming to replace the US dollar. Also, there is no need to panic because statistics have shown that (bank) deposits have remained the same. There won’t be anything like bond notes account as the multi-currency system will be still in place,” said Dr Mangudya.
The central bank is on a crusade to educate Zimbabweans on bond notes. Bankers’ Association of Zimbabwe president Dr Charity Jinya said financial institutions had taken steps to ensure a smooth roll-out of the bond notes. Bond notes will be distributed through banks or transacted electronically to complement the multiple currency system.
