RBZ moves to cushion, incentivise exporters
Exporters are now set to retain the bulk of their earnings following the decision by the central bank to allow them to keep 100 percent of the incremental portion of their export receipts.
Most Zimbabwean exporters, with the exception of those listed on the Victoria Falls Stock Exchange and those operating from Special Economic Zones, were required by law to surrender 40 percent of their export earnings in exchange for local Zimbabwe dollars at the official exchange rate.
This practice was seen by exporters as not sustainable and prejudicing them of their hard-earned foreign currency which changes hands at a premium of 90 percent on the parallel market.
Market watchers described the surrender requirements of 40 percent at the official exchange rate as akin to killing the goose that lays the golden egg.
Exporters claimed that after surrendering a portion of their export proceeds at the official exchange rate, they were having to meet their own obligations for local goods and services at the widely used parallel market exchange rate.
Manufacturers for instance, though getting some foreign currency at the auction system, were not getting adequate forex resources for all their import requirements.
Noting this, the RBZ has now increased the retention threshold.
“With immediate effect, exporters in the manufacturing, horticulture and crossborder transport sub-sectors shall be eligible to retain 100 percent of the incremental portion of their export receipts” reads part of the 2022 Monetary Policy Statement released by the RBZ yesterday.
Further, the central bank said, “retention threshold for tobacco and cotton growers shall be increased to 75 percent for the forthcoming tobacco and cotton marketing seasons”.
This move, according to the central bank, is expected to “increase participation by small scale growers and to boost tobacco and cotton production in the country”.
The tourism sector, hit by the effects of the Covid-19 pandemic, was another beneficiary of the new export retention measures contained in the 2022 MPS.
“In order to respond to the adverse effects of COVID-19 on the tourism sector, which was hard-hit by the pandemic not only in Zimbabwe but the world over, with immediate effect, players in the tourism and hospitality industry shall retain 100 percent of their foreign currency earnings to allow them to quickly recapitalise and procure the necessary goods and services required by tourists and travelers.”
Tobacco Merchants, who have supported the crop for the last couple of years were also given some incentives.
The merchants will now retain 80 percent on the portion of the incremental value addition repatriated into the country and 100 percent of proceeds from local sales of tobacco through inter-merchant sales.-eBusiness Weekly
