HARARE – The Reserve Bank of Zimbabwe (RBZ)’s decision to “seize” 50 percent of all export proceeds into its nostro accounts as part of strategies to ease the biting liquidity crisis is tantamount to expropriation, a leading economist has said.
This comes after the central bank last week directed local banks in receipt of all export proceeds in United States dollars to credit the exporter’s foreign currency account with only half the amount.
The balance will be sent to the Reserve Bank, which will deposit that amount into its offshore nostro account.
At the same time, it will extend credit facilities of the same amount, plus bond notes to the value of five percent of the total value of the export consignment, to the real-time gross settlement systems (RTGS) account of the exporter’s bank for the use of that exporter.
Veteran economist John Robertson said while the purpose of the latest arrangement appeared to help ease the current cash-crisis, it “invites more speculation on the planned seizure of export proceeds”.
Zimbabwe, which abandoned its local currency in 2009 in favour of a multiple currency system dominated by the greenback, has been experiencing cash shortages since late last year due to a combination of bad policies, including the Indigenisation Act.
The situation has been exacerbated by the central bank’s decision to introduce bond notes, resulting in many cash machines running dry and people queuing for days outside banks to retrieve as much of their money as possible — dreading the imminent return of the notorious “Zimbabwe dollar”.
The authorities have responded by imposing withdrawal limits — sometimes as little as $20 per day.
The Reserve Bank has also banned anyone selling a house or business from sending the proceeds out of the country.
Robertson said the first objective of the new measures is to reduce the proportion of export revenues being used to pay for imports.
Only half of the exporter’s revenue placed in the company’s foreign currency account will be readily available to pay for imports.
“To use the credit recorded in the bank’s RTGS account to pay for even more imports, it has to be assumed that approval will have to be sought. If it is granted, this is likely to place the importer into a queue, the length of which will be determined by the imported goods’ position on a priorities list.
“The apparent intention behind this is to encourage the business concerned to look for and support local suppliers of the needed products,” he added.
The respected economist noted that the measures are also expected to enable the central bank to build up a US dollar balance that it can use to meet external obligations.
The most pressing of these at present is the commitment to pay, by June 30, 2016, the arrears of $1,8 billion owed to the World Bank, the International Monetary Fund (IMF) and the African Development Bank.
“However, if RBZ does manage to raise and pay the $1,8 billion, Zimbabwe will not automatically start receiving IMF facilities.
“For some reason, government statements on the issue imply the belief that IMF money will be flowing in as soon as the $1,8 billion is paid, but the country will merely qualify to be considered for the possibility that it has recovered enough to handle more debt,” he said.
“To improve its credibility that much, the country will first have to restore productive capacity sufficiently to earn the points needed to show that it can meet additional loan repayments, even while resuming payments on the remaining $8 billion that is still owed on outstanding debts,” Robertson added.