The Sunday Mail
LOCAL industry believes a combination of Reserve Bank of Zimbabwe interventions and positive prospects in agriculture and mining will help decisively deal with cash shortages that have plagued the market for the past 15 months.
Government is improving net financial inflows into the economy by cutting imports while increasing exports.
RBZ recently unveiled a US$70 million nostro account stabilisation facility to help local producers make critical offshore payments for raw materials.
While the tobacco marketing season – beginning March 15 – is forecast to inject fresh capital as merchants bring in offshore funds, increased output in the agricultural sector, particularly of maize, will also reduce the import bill.
Market watchers say this year’s tobacco crop can earn over US$800 million in exports; and encouragingly, gold exports are on the rise.
Confederation of Zimbabwe Industries vice-president Mr Sifelani Jabangwe told The Sunday Mail Business that if Government continued on its current path, cash shortages could be eliminated.
“If the central bank’s US$70 million exchange/nostro stabilisation facility is disbursed starting from this week to deal with the current delays in the processing of outgoing payments for the procurement of productive imports, cash shortages won’t stay for long as this would have eased pressure on the demand of the US dollar.
“The opening of the tobacco auction floors on March 15 will help to ease the cash crisis as millions of physical US dollars will come into the country through the buying of tobacco. More foreign currency will change hands … and in the end improve the liquidity crunch,” said Mr Jabangwe.
Last year, the RBZ unveiled export incentives as a carrot for local producers.
There is growing expectation Government will retain considerable foreign currency reserves if output from the Command Agriculture Programme reaches the targeted two million tonnes of maize. Mr Jabangwe said, “Last year, we lost over US$200 million to grain imports but with brighter prospects of clocking over two million metric tonnes, that amount will be used for other developmental issues rather than pumping out the much-needed foreign exchange outside the country.
To stimulate more production from artisanal miners, the central bank recently doubled a targeted loan facility for small-scale producers to US$40 million. A huge trade deficit has significantly depleted Zimbabwe’s cash stock and caused disruptions in the manufacturing and retail sectors. RBZ Governor Dr John Mangudya said last week the tobacco season would improve cash supplies.
