Mangudya defends sale of fuel in US$
RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya yesterday defended the licensing of more service stations with free funds to purchase and sell fuel in foreign currency, arguing that it will lessen the burden on the fiscus.
Speaking before Parliament’s budget committee, Mangudya said the country will be able to save over US$200 million, which is spent to import fuel every month.
“Fuel is not a central bank issue. We were simply implementing statutory (SI) 212 of 2019 issued in September last year which is clear to the effect that fuel is to be paid in foreign currency.
“The advantage is that we cut the import bill which is $500 million per month. 40 percent of which has been going to the fuel imports will go to the interbank.
“We are borrowing to import fuel and we can’t be borrowing money that is available in Zimbabwe,” said the RBZ governor.
He added that the new measures will help foreign currency from the parallel market into the formal market.
“We need to give the informal, market a product they can use while in the informal sector and bring the money to the formal sector.
“We will be monitoring and giving feedback. We are not going backwards,” Mangudya said.
Asked by Muzarabani North MP Soda Zhamu if he was not following the footsteps of his predecessor Gideon Gono who liberalised the fuel sector before the introduction of the dollarisation era, Mangudya said the country was de-dollarising.
“We are not re-dollarising. De-dollarising does not happen immediately, like I said it will take about five years … You think the policies are not working?
“The opposite is true. Players and businesses are the ones failing to produce and respond to these policies.
“It disappoints my heart that we import things that we can make on our own … The problem is we have too many abusers and too much arbitrage in the country,” Mangudya explained.
Government recently gave the green light for companies with free funds to import fuel amid shortages that have continued to cripple several businesses and individual consumers in the country.
The country which has been reeling from foreign currency shortages, needs around US$35 million weekly to import fuel. Zimbabwe requires 4,1 million litres of diesel and 3,8 million litres of petrol daily.
The RBZ governor said bureau de changes are being liberalised to enable them to provide assistance to small businesses.
“We are liberalising the bureau de changes so that they will at least provide small businesses and individuals who need foreign currency to travel and conduct business. We have been having meetings and we will be putting mechanisms to monitor against arbitrage,” Mangudya said.