Foreign currency receipts surge 33,6pc

31 Jul, 2022 - 00:07 0 Views
Foreign currency receipts surge 33,6pc

The Sunday Mail

Michael Tome
Business Reporter

ZIMBABWE’s total foreign currency receipts between January and June 2022 improved by 33, 6 percent to US$5,4 billion compared to US$4,1 billion during the same period in 2021 despite raging economic headwinds.

This was revealed by  Dr Nebson Mupunga the Deputy Director, Economic Policy and Research Division with the Reserve Bank of Zimbabwe (RBZ) at a recent engagement with participants at the Chartered Accountants Academy (CAA) Business School convention.

Conversely, foreign payments reached US$3, 8 billion in the period to half year leaving the country’s balance of payment in a favourable position.

This is an encouraging trade balance relative to a deficit incurred in the same period in 2021.

Zimbabwe is experiencing a positive current account stemming from the improved value of exports of both goods and services and international transfers of capital since 2019.

This has been a result of a combination of factors including firming global commodity prices and rising diaspora remittances amid a tightening economy.

Also pushing imports in the first half was the rising global prices of fertilizers, food, and energy.

Export proceeds in the half-year period surged 45 percent to US$3, 5 billion from US$2, 4 billion in the comparable period mainly driven by mineral exports as commodity prices continued to be significantly higher in 2022.

In his 2022 mid-term review and supplementary budget on Thursday Finance and Economic Development Minister Professor Mthuli Ncube acknowledged that “Gold exports benefited from higher global prices amid safe-haven demand, coupled with higher production as incentives to producers continue to bear fruit.”

Agricultural exports increased to US$434,5 million in 2022 from US$303,2 million in the first half of 2021, on account of higher tobacco export volumes and firmer prices.

Tobacco is among the top crops driving Zimbabwe’s agriculture economy along with cotton.

On the flip side, diaspora remittances grew by 23 percent to US$797 million from US$651 million in 2021 while non-governmental organizations (NGO) funds receipt increased to US$562, 1 million from US$420 million representing a 34 percent growth.

Foreign investments jumped by 365 percent to US$104 million from US$22, 4 million while loan proceeds into the country declined 15, 2 percent to US$428 million from yesteryear’s US$505 million.

“Foreign currency receipts have remained robust with a continued positive growth rate since 2019 thus supporting a favorable balance of payments.

“The country continues to record a current account surplus driven by remittances and other transfers,” said Dr Mupunga.

According to Minister Ncube, exports are projected to reach US$7, 3 billion by year-end spurred by increases in mineral receipts benefiting from the mineral commodity price boom, as well as increases in agriculture and manufactured exports.

He however forecasted a US$8, 1 billion import bill by year-end.

“Merchandise imports are also projected to reach US$8, 1 billion driven by fuel, machinery, and raw material imports.

“As a result, the country’s balance of payments remains favorable with a current surplus of US$387, 1 million having been registered during the first half of 2022,” he said.

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