Prosper Ndlovu, Business Editor
BANKS are prioritising exporters in the allocation of foreign currency as part of measures to grow the economy, an official said.
Banks have come under fire recently over failure to facilitate foreign exchange payments to their corporate clients amid reports that most firms were queueing for more than a month to access hard currency to pay their foreign suppliers.
The cash shortage has also led to several financial institutions suspending master and visa card services for travellers and ordinary depositors.
Bankers’ Association of Zimbabwe (BAZ) president, Dr Charity Jinya, says businesses that rely on imports need to embrace import substitution to reduce the import bill, estimated at about $2.5 billion annually, which is draining the foreign currency.
She said foreign exchange disbursement was done in line with the Reserve Bank of Zimbabwe (RBZ) guidelines and priority allocation framework.
“The issue is that there is a priority list in terms of foreign currency allocation that was given by the RBZ whereby exporters are priority number one. We might not give them all the funds but we ensure that exporters are kept in business.
“The problem is that there are some who want to spend more that their inflows but we discuss with the client,” said Dr Jinya who is also the managing director of MBCA Bank.
“As for importers, I don’t think it is sustainable to remain on the import business because they will have to rely on the goodwill of exporters. Under this environment net importers have a bit of a problem but exporters have a higher chance of getting foreign currency from banks. We are also limiting withdrawals so as to ensure businesses have money for their operations.”
The BAZ president urged Zimbabweans to use bond notes for domestic transactions to ease pressure on foreign exchange as well as electronic transactions to reduce demand for cash.
She said BAZ has since set up a committee that looks at foreign currency requests by clients and gives advice on how best allocations can be done.
“Our problem is that we have been taking more money outside the country than we generate and we need to understand that as both banks and clients. The measures that have been put in place by the RBZ are meant to encourage import substitution and we need to support that,” she added.
Dr Jinya said this while responding to questions during a gathering with Bulawayo women entrepreneurs last Thursday. She called for increased funding and empowerment for women as a long strategy to achieve inclusive economic growth and bridging the gender inequality.
Earlier on the participants had queried what they termed “stringent” bank loan application requirements. Some women complained over lack of collateral as properties were registered in their spouses’ names.
The Government has stressed the need to go back to basics by revitalising the productive sector for export purposes so as to increase earnings. The approach is meant to reduce imports and achieve trade balance.
Latest records from Zimstat indicate Zimbabwe’s trade deficit stood at $309,7 million in the first two months of 2017 after exports fell seven percent as the country continues to rely on imported products.
Latest data shows that imports in the first two months of the year stood at $808,8 million while exports amounted to $499,1 million. Imports increased by 10 percent to $424 million from $385 million previously. Exports on the other hand decreased by seven percent to $240,5 million. Zimbabwe however registered a trade surplus of $14 million against South Africa, its largest trading partner.