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Reserve Bank of Zimbabwe (RBZ)

The Reserve Bank of Zimbabwe has called on all stakeholders to curb imports in order to reduce the money exported on a yearly basis. Zimbabwe imports currently hover around $6-7 billion against exports of $3-3,5 billion resulting in a negative trade balance of around $3 billion. RBZ Deputy Governor Dr Kuphukile Mlambo said supporting the domestic market can reduce the importation of money.“Every year we are exporting cash up to $3 billion through the importation of goods from other countries. If we are exporting $3 billion every year that is the reason we don’t have cash in the economy.”

He added that imports in the country are high and largely consumptive in nature even for some products that are manufactured locally.

“Some of the things that we import like water and cereals are manufactured locally so in actual fact we are sending out money unnecessarily and that is a problem because we do not print the US dollar. There is need to do things which bring money in the country than things which send money out.”

Dr Mlambo said Zimbabwe should consider fiscal and internal devaluation to promote export competitiveness in the absence of its ability to effect nominal exchange rate adjustments.

Internal devaluation, Mlambo said, entailed that a country which cannot devalue its nominal exchange rate, can gain competitiveness and promote export performance through streamlining domestic costs of production.

“We need to deal with domestic cost of production or pursue internal devaluation because a bottle of water manufactured locally costs 35 cents while imported bottles costs 15 cents.

“We need to clean the economy by re-looking at our policies, legal institutions and the regulatory conditions that govern business in this country,” he said. — BH24.