Foreign payments gobble US$6bn in 8 months

ZIMBABWE has channeled more than US$6 billion towards foreign exchange payments from January 2022 to September 2022, according to the Reserve Bank of Zimbabwe (RBZ) latest report.

While the country’s import bill is in a slowdown mode due to a resurgent domestic productive sector under the Second Republic, foreign payments remain on the higher side as most businesses rely on imports for key raw materials, critical equipment and spare parts.

Reserve Bank of Zimbabwe (RBZ)

Part of the payments include medical expenses in foreign institutions, repatriation of dividend and capital funds by foreign investors, as well as payment of token funds towards foreign arrears clearance, among others.

The country recorded US$7,7 billion in foreign currency earnings between January and August this year, a 32,4 percent increase from the same period last year, according to official statistics.

High commodity prices and Diaspora remittances are driving the increased foreign currency earnings this year, as was the case last year. Exports of agricultural produce and manufactured goods, as well as development partner support also shore up Zimbabwe’s forex earnings.

Last year, the country achieved a record US$9,7 billion in foreign currency inflows, surpassing the 2013 record of US$7,6 billion. This year’s target is US$12 billion.

In the latest update Apex Bank governor, Dr John Mangudya, said the US$6 049 863 052 has been channelled towards foreign exchange payments for different critical needs and went on to give a breakdown.

“In line with the bank’s commitment to regularly keep the public informed of development in the foreign exchange market, the bank hereby publishes a schedule showing the total foreign exchange payment for the period January to September 2022 by source, amounting to US$6 049 863 052, broken down as follows: — foreign currency accounts (US$4 480 355), foreign exchange auction allotments (US$979 949 984) and the interbank market (US$125 300 9170,” said Dr Mangudya.

“The cumulative foreign exchange auction allotments since the inception of the foreign exchange auction system stand at US$3 576 330 707.”

Dr John Mangudya

The Governor said 833 entities have benefitted from a total of US$54,4 million funding availed through the forex auction system during the month of September 2022.

Out of the above, he said 210 entities benefitted from US$46 million allotted under the main foreign currency auction while 623 benefitted from US$8,4 million allotted under the SMEs auction.

“The bulk of the auction allotments during the month of September (70 percent) was for payment for raw materials and machinery and equipment with the remaining 30 percent of the total allotments going towards payment of services, consumables, retail and distribution, pharmaceuticals and chemicals, packaging and fuel, electricity and gas,” said Dr Mangudya. —chronicl.co.zw