Afreximbank millions start flowing in
THE Reserve Bank of Zimbabwe has started drawing down the US$600 million nostro stabilisation facility availed by Cairo-headquartered African Export Import Bank (Afreximbank), with a number of sectors already benefitting from the money.
Monetary authorities say the facility has started stabilising a backlog in foreign payments.
The backlog has left local firms buying foreign currency at a premium.
RBZ Governor Dr John Mangudya told The Sunday Mail Business that foreign exchange demand was bound to increase due because of low production levels and limited fiscal space.
“We have starting drawing down of the US$600 million nostro stabilisation facility and we have started servicing the market. For those who have had foreign exchange backlogs, they have started paying what they owed.
“We are giving up to more than US$30 million weekly for essential commodities, to buy critical raw materials, and we are also giving US$4 million weekly to the pharmaceuticals to service the health sector.
“But the rise of some prices in the economy is not justifiable; it’s just lack of discipline and bad business practice as there will be no reason to hike prices when you are allocated forex on a weekly basis,” said Dr Mangudya.
Many businesses are using a fourtier pricing system that sees goods and services priced differently depending on if one pays using US dollars, bond notes, RTGS or mobile money.
The GM of Zimbabwe Stock Exchange-listed Meikles Limited’s retail arm Meikles Mega Market, Mr Panganai Ngorima, said they were yet to benefit from the stabilisation facility.
“We are in the dark about the issue as we are still battling with outstanding telegraphic transfers from last year’s transactions but the import payments via the telegraphic transfer difficulties haven’t changed that much since last year.
“As such, imports of finished products and indeed raw materials, have been adversely affected leading to shortages of certain basic commodities,” said Mr Ngorima.
He said it was too early to solely depend on local manufacturers to satisfy retail demand because of capacity constraints and production inefficiencies.
With the stabilisation facility being unlocked, the RBZ expects prices to ease.
Dr Mangudya said it was good that Government was working on laws to end multiple pricing, with a Commercial Crimes Court expected to deal with individuals and businesses who promote financial abuses.