Weekly gold ex­ports surge

Chronicle (Zimbabwe) - - Business Chronicle - Tinashe Ma­kichi

WEEKLY gold ex­ports have in­creased by 33,3 per­cent to $16 mil­lion over the past four months largely driven by the 5 per­cent ex­port in­cen­tive in­tro­duced by the Re­serve Bank of Zim­babwe in May this year.

Speak­ing at the Con­fed­er­a­tion of Zim­babwe Re­tail­ers SI 64 break­fast meet­ing yes­ter­day, RBZ Gov­er­nor Dr John Man­gudya said the im­pact of the pol­icy mea­sures in­tro­duced by the cen­tral bank has been im­pres­sive.

The RBZ es­tab­lished a $200 mil­lion for­eign ex­change and ex­port in­cen­tive fa­cil­ity sup­ported by the African Ex­port-Im­port Bank, as part of pol­icy mea­sures to ad­dress chal­lenges af­fect­ing the econ­omy.

The ini­tia­tive was also meant to re­solve liq­uid­ity prob­lems. The fa­cil­ity was aimed at pro­vid­ing a cush­ion to the high de­mand for for­eign cur­rency and to pro­vide an in­cen­tive of up to five per­cent on for­eign ex­change re­ceipts, in­clud­ing to­bacco and gold ex­port pro­ceeds.

“The mul­ti­ple cur­rency sys­tem de­pends on the ca­pac­ity of Zim­babwe to earn for­eign cur­rency. Be­cause of the ex­port in­cen­tive, which we in­tro­duced on May 5, 2016 we have seen gold ex­ports go­ing up to $15-$16 mil­lion ev­ery week and this is an in­crease from $12 mil­lion.

“Our aim is to reach $20 mil­lion worth of gold ex­ports (weekly). By giv­ing an (ex­port) in­cen­tive of five per­cent, the ar­ti­sanal min­ers are now sell­ing gold to the RBZ through the Fidelity Re­finer­ies and Prin­ters,” said Dr Man­gudya.

“It is a fact that all the com­pa­nies in Zim­babwe re­quire this ex­port in­cen­tive scheme so that they can ex­pand. The in­trin­sic value of the ex­port bonus or in­cen­tive scheme is to at­tract and en­hance ex­ports by Zim­bab­weans so that at the end of the day there is enough for­eign cur­rency in this coun­try,” he said.

Dr Man­gudya also said the use of point of sale ma­chines and other elec­tronic pay­ment sys­tems has in­creased since Jan­uary this year, demon­strat­ing how far the mar­ket has em­braced the use of plas­tic money. POS, and other elec­tronic pay­ment sys­tems have gone up to $5,5 bil­lion as at end of July 2016 from $4,1 bil­lion in Jan­uary.

Dr Man­gudya said that the num­ber of POS ma­chines has in­creased to 20 000 from 17 000 as at May 2016.

“So we have seen an im­prove­ment in value, vol­umes and the num­ber of agents put in place in this coun­try. We are try­ing to make sure that we are not putting too much pres­sure on cash.

“We have been pleased by the im­pact of the mea­sures that we in­tro­duced and as I have al­ways said in my Mon­e­tary Pol­icy State­ments, it is back to ba­sics,” said Dr Man­gudya.

On Statu­tory In­stru­ment 64, Dr Man­gudya said that the in­stru­ment is a tool aimed at pro­mot­ing lo­cal pro­duc­tion, as pro­duc­tiv­ity is the so­lu­tion to the cur­rent eco­nomic chal­lenges.

He said this stemmed from the fact that Zim­babwe over-lib­er­alised its econ­omy in 2009 and for­got to stop im­por­ta­tion of prod­ucts that were pro­duced lo­cally.

“The Zim­bab­wean sit­u­a­tion is that we over lib­er­alised the econ­omy, we opened too many doors. It is a fact the in­vestor per­cep­tion on Zim­babwe is bad at the mo­ment, which is why in­vestor par­tic­i­pa­tion in the coun­try is low.

“The in­tro­duc­tion of the SI 64 was done after con­sul­ta­tions with var­i­ous busi­ness rep­re­sen­ta­tive or­gan­i­sa­tions. The idea was to pro­mote lo­cal con­tent value chains and there­fore out of this we need to in­crease pro­duc­tion. The im­port pri­or­ity list is, how­ever, ad­min­is­tered by banks and not the RBZ,” said Dr Man­gudya.

In­dus­try and Com­merce Min­is­ter Mike Bimha said the chal­lenges faced by the lo­cal in­dus­try are known and there was need to build a good work­ing re­la­tion­ship be­tween Gov­ern­ment and the pri­vate sec­tor.

He said in­dus­try should en­gage the Gov­ern­ment on all the is­sues that may be af­fect­ing them and get a proper po­si­tion rather than re­ly­ing on spec­u­la­tive re­ports.

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