Zimpapers Logo

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya on Wednesday last week liberalised the US dollar exchange rate against Real Time Gross Settlement (RTGS) dollars and all currencies in the multi-currency basket.

This is part of a host of measures and strategies seeking to formalise trade in foreign currency. Dr Mangudya’s interventions are meant to bring sanity in the foreign currency market, promote exports, boost Diaspora remittances and investments, eliminate multi-tier pricing of commodities, as well as preserve the value of local forms of money.

The RBZ had been insisting on pegging RTGS balances at one-to-one with the US dollar, but shortages resulted in high premiums for US dollars outside RBZ control.

However, after liberalising the rate, the US dollar is now floating at 1:2,5, a rate that some exporters are willing to take, while others think otherwise. The apex bank also proposed foreign currency retention figures for different sectors as follows; manufacturing 80 percent, gold large and small-scale 55 percent, all other minerals 50 percent, tobacco and merchants for inputs, horticulture, transport and tourism all 80 percent while tobacco and cotton growers will receive 30 percent.

Retained export receipts shall, however, be utilised within 30 days, after which the underutilised export earnings will be offloaded into the market at the prevailing market exchange rate or critical imports and external payments.

This has, however, created a bone of contention with mainly farmers and miners openly declaring their displeasure of the figures, while other sectors indirectly expressed their reservation. It is our humble submission that the economic problems Zimbabwe is facing should not be saddled on individuals, but all citizens should play ball in the quest to find lasting solutions.

We implore our exporters that inasmuch as their service remains critical to the country and that they should be rewarded accordingly, it does not make much sense to insist on holding onto 100 percent of their forex earnings yet other sectors are yearning to receive the foreign exchange.

We encourage all the exporters to support Finance and Economic Development Minister Professor Mthuli Ncube and RBZ Governor Dr John Mangudya’s initiative to turn around the economy. Those who earn foreign currency should be mindful of the fact that there are many local companies that provide critical support services to the economy, but are non-exporters who also need foreign currency.

A good example is Delta Beverages, which produces soft drinks; bread manufacturing companies, among others who also need foreign currency to provide the essential services.

The list is endless given that in the social services, we all need public lighting, water treatment chemicals, essential medical drugs, that all need foreign currency to import.

Therefore if our exporters refuse to release the money, where will foreign currency for some of these essential services come from? We therefore support the central bank’s proposal for all the foreign currency not used after a certain period to be converted to RTGS dollars using the ruling rate.

The system is that anyone who needs the money will be in a position to get it as and when they need it, dismissing speculation of potential shortages. Our industrialists should also develop technologies that help to produce more local substitutes so that the country does not also unnecessarily spend hard earned foreign currency.

Given that the RBZ will continue sourcing for foreign currency to support the floating of the currency means there is not even a single day where people importing essential commodities needed to stimulate industrial production and to support local authorities and the health sector will run out.

What is critical is for all Zimbabweans to understand that there is a national problem that needs to be fixed and that it takes everyone’s effort for the challenges to be overcome.