The Sunday Mail
Lincoln Towindo and Livingstone Marufu
THE Reserve Bank of Zimbabwe has increased foreign currency allocation for basic and essential commodities to curtail threats of shortages.
Central bank governor Dr John Mangudya said the injection of additional foreign currency comes on the back of marginal increases in prices of goods and commodities in most shops in Harare, where fears of shortages reminiscent of 2007 have swelled.
This has triggered panic buying and illegal monetary transactions.
However, Dr Mangudya dismissed suggestions that most basic commodities are beginning to disappear from shop shelves.
He said the central bank is allocating an additional US$30 million a week for basic and essential commodities importation with an additional US$15 million being spent on fuel and electricity imports.
He said the availability of foreign exchange has remained stable due to growing imports.
Furthermore, the RBZ will this week introduce a US$600 million Nostro Stabilisation Facility from Cairo-headquartered African Export Import Bank (Afreximbank) to start addressing the foreign currency shortage on the market.
This nostro stabilisation facility is meant to deal with ongoing delays in the processing of foreign payments by banks for the procurement of productive imports as part of a raft of measures to stabilise the economy.
The facility will cover the foreign currency gap that widened after closure of the 2017 tobacco marketing season.
RBZ expected foreign exchange receipts from platinum and chrome to be treated in the same manner as gold, diamonds, tobacco and cotton to ensure that the nostro stabilisation facility is supported by a continuous stream of export receipts.
Another export incentive scheme worth $300 million is expected to help the situation.
Last week, the RBZ chief was expected to sign a Memorandum of Understanding with top Afreximbank officials who were in the country on official business.
Responding to questions from The Sunday Mail, Dr Mangudya said: “We are making supplementary allocations of US$30 million on a weekly basis for basic and essential imports.
“Specifically, fuel is getting US$10 million per week, US$4 million per week for cooking oil raw materials, US$5 million towards electricity and around US$2 million for pharmaceuticals.
“Nothing material has changed in the availability of foreign currency. To the contrary, exports have gone up.”
In a statement earlier, the RBZ also contested social media reports insinuating that Finance and Economic Development Minister Patrick Chinamasa had ordered the printing of more bond notes in order to chase the US dollar in illegal transactions on the streets.
“The intention of social media (abusers) is to confuse the market through instilling fear in people.
“Zimbabweans should refuse to be hoodwinked by fake social media statements designed to increase premiums on the parallel markets by misguided rent seekers.”
Dr Mangudya assured the nation that: “There are no shortages of basic commodities.
“On the contrary, foreign exchange currently being allocated for basic and essential commodities has been increased to ensure that shortages of commodities do not occur within the economy.
“In addition, the Minister of Finance and Economic Development did not print bond notes to buy US dollars from the streets.
“Such malicious statements are counter-productive and are meant to sabotage the economy that is on the rebound on account of the good agricultural outturn, strong performance of the mining sector and the recovery of the manufacturing sector.”
On the nostro stabilisation facility, Dr Mangudya said: “The board of directors of Afreximbank had its board meetings in Harare from 21 to 23 September 2017. We expect to sign the MoU on the disbursement of the US$600 million nostro stabilisation facility today (yesterday).
“Government is also handing over a property that has been donated to Afreximbank.”
There has been a noticeable increase in the prices of some commodities over the last few weeks in many retail shops with players in the sector attributing the surge to foreign currency shortages.
During the past few months, the greenback has been scarce on formal financial avenues, but accessible on the informal market where it is being sold for a premium.
This has resulted in illegal currency dealers asking for at least $135 in bond notes for one to access US$100.
Electronic money transfers for the highest United States denomination are being pegged at about $150.
Suggestions are that the cost of importing some goods or raw materials has increased due to foreign currency shortages, subsequently pushing the costs of production and prices up.