Browsing: Africa Exports

RBZ Directs Exporting Companies to settle their power bills in hard currency

Among Zimbabweans, there is a clear preference for the use of the United States dollar over the local currency. This is to the extent that there are some government services which cannot be accessed without United States dollars.

There are also some basic household commodities and goods that one will need to pay for using hard currency and will not be able to purchase if they have the local currency. Following on the issue of the currency crisis is the fact that exporters are already heavily burdened with operating costs in United States dollars.

Regardless of whether it is an exporter or partial exporter, 40 per cent of all export proceeds generated by Zimbabwean-based exporters must be surrendered to the central bank. This is how the central bank has been funding its auction system to allocate foreign exchange to importers.

To be fair, the surrender requirements are not uniformly or universally applied. The central bank has introduced some concessionary measures. For instance, the tourism and agricultural sectors have been exempted from all foreign exchange surrender requirements. In the mining sector, players are allowed to retain up to eighty per cent of their export proceeds and only must surrender twenty per cent of their export proceeds.

The World Bank (WB)—one of the world’s largest sources of funding and knowledge for the developing sphere published its Global Economic Prospect report in January 2021.  

The report zoomed in on the prospects of the global economy and Africa, displaying how the region remains pinned by the shocks of COVID-19 unless sound policy changes and strategic investment-enhancing reforms are made.  

On the bright side, the global economy is expected to expand by 4 per cent in 2021—this is dependent on the progression of COVID-19 vaccine provision throughout the year.