Resurgent exports push forex earnings to record US$9,7bn

ZIMBABWE has registered a record high foreign currency receipts amounting to US$9,7 billion for the year 2021 with the bulk of the earnings coming from the resurgent export sector which pumped in about US$6,2 billion.

Export proceeds in 2020 were US$3,7 billion improving by 66,6 percent last year.
Economic experts have said the growth in exports is indicative of the solid economic growth being driven by improved domestic production and enhanced competitiveness.

This is evidenced by the jump in industry capacity utilisation to about 61 percent in 2021 from 47 percent in 2020, according to the Confederation of Zimbabwe Industries.

Estimates from the Reserve Bank of Zimbabwe (RBZ) show that locally manufactured products have claimed back 80 percent of shelf space in shops compared to recent years when imports dominated.

The progress being recorded is in response to the comprehensive economic reform measures being spearheaded by the Second Republic led by President Mnangagwa since coming into power in 2018.

In his 2022 Monetary Policy Statement issued on Monday, Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya said foreign currency receipts last year improved by 53,5 percent from US$6,3 billion in 2020.

“The country recorded its highest ever foreign currency receipts of US$9,7 billion in 2021, an increase of 53,5 percent from 2020.

“This performance, which dwarfs the previous record of US$7,6 billion recorded in 2013, is attributable to increased international commodity prices, increased international remittances and the gold incentives put in place by the Government,” said Dr Mangudya.

This was a gain for the economy when compared to merchandise imports, which increased by a narrow 28,7 percent from about US$5 million in 2020 to US$6,5 million last year largely driven mainly by increases in fuel, machinery and raw material imports.

“The increase in imports was reflective of a growing economy whose import absorptive capacity was increasing,” said Dr Mangudya.

“Increasing crude oil, edible oils and fertiliser prices also drove imports higher,” he said, adding that food imports reduced on account of reduced maize imports following a good agricultural season.

Diaspora remittances were on second spot in terms of contributing to foreign currency receipts at US$1,43 billion — improving significantly from US$1 billion in 2020.

In the past three years, the country has been recording an upward trajectory in diaspora remittances driven by the liberalisation of the use of free funds locally and improved channelling of remittances through formal channels.

International remittances from non-Governmental organisations during the period under review increased by 50,5 percent to US$975 million from US$647,8 million in 2020.

Similarly, loan proceeds from offshore amounted to US$876 million reflecting a 3,6 percent improvement from US$845 million in 2020.

Other foreign currency receipts came through foreign direct investment, which accounted for US$91,14 million showing a positive trajectory of 127,5 percent from US$40,06 million achieved in 2020 while income receipts were US$118,93 million as at December 31, 2021 from US$56,85 million in 2020.

Meanwhile, in terms of foreign currency payments, Dr Mangudya said the banking sector processed US$6,99 billion last year representing a 45,2 percent improvement from US$4,82 billion recorded in 2020.

“The upward trajectory in foreign payments was largely on account of increased foreign currency supply from the auction system and exports, consistent with the increased capacity utilisation in industry.

“Consequently, significant increases in foreign currency receipts relative to foreign
payments resulted in significant increases in foreign currency deposits in the banking
sector to an average of US$1,7 billion in 2021,” he said. – The Chronicle