Millions imported to ease cash crunch
Zimbabwe will soon get US$200 million from Africa Export-Import Bank to ease cash shortages that beset some towns and cities over the weeks.
The money will be released from Afreximbank’s nostro and export facility following discussions with the Reserve Bank of Zimbabwe.
A nostro account is a bank depository held in a foreign country and denominated in the currency of that land. Such accounts essentially facilitate import and export payments, especially in the case of inter-state transactions.
The US$200 million is a loan and will be offset in terms of debt clearance instruments already agreed with Afreximbank.
Cumulatively, the lender is assisting with US$1,369 billion: US$200 million as an interbank facility, US$200 million for grain imports, US$150 million for small-scale gold mining and US$819 million bridging finance.
Last week RBZ governor John Mangudya said the cash shortage prevailing in the country has become a national issue and not a challenge for financial institutions alone.
Speaking at the Parliamentary Portfolio Committee on Budget, Finance and Economic Development chaired by Mutoko South MP David Chapfika, Mangudya said currently there were competing demands for foreign exchange in the country.
Apart from domestic needs, the regional market was now using Zimbabwe as a conduit for foreign currency, he said.
“We have done a number of things to solve this cash challenge. We also do believe that this is a national challenge and not a banks’ challenge. Everyone has got a responsibility to ensure that we sustain the integrity of the multi-currency system, it is a good system and we need to look after it jealously,” Mangudya said.
He said currently the demand for cash was being fuelled by civil servants salaries and bonuses, and cash payouts to small-scale gold miners and tobacco farmers.
He, however, said the country relied heavily on imported products and this was one of the major reasons for the shortage of cash in circulation as the nation was not manufacturing or producing enough.
“We are advocating for a make and buy Zimbabwe campaign, so that we produce and then sell.
“As the RBZ, we have injected cash of $145 million over the past three months from January 1 to April 6 that has got into the market and that money we don’t think it’s circulating as the way it should circulate. Banks have imported $118 million during the same period, but that money is not there in the banks,” he said.
The Bankers’ Association of Zimbabwe president, Sam Malaba, said there was nothing unusual about what was happening in the banking industry, but banking industry sources say international financiers have grown tired of advancing lines of credit.
