Reserve Bank of Zimbabwe Governor Dr John Mangudya yesterday expressed shock that Zimbabweans blew a total of $206,7 million on DSTV subscriptions paid through nostro accounts between July and December 2016.
This brings the nation’s priorities to question at a time when the country is experiencing a crippling foreign exchange shortage with the productive sector struggling to meet foreign payment obligations to different suppliers.
In his 2017 Monetary Policy Statement the central bank chief said the $206,7 million “should have been settled locally and thus preserve foreign exchange for raw materials and other foreign payments that include education”.
He reported that DSTV card transactions – which require pre-funding of nostro accounts -“ were the second largest user (after fuel) of foreign exchange during the second half of the year.
“Use of hard earned foreign currency in this manner is not sustainable for the economy,” he said.
Dr Mangudya called on market players, especially banks, to exercise discipline and rationality in the distribution of foreign exchange among the competing needs of the economy.
“Spending more foreign exchange on DSTV subscriptions than on raw materials to produce cooking oil, for example, is not only counter-productive but also illogical,” said Dr Mangudya.
“Similarly, Zimbabweans’ appetite to externalise foreign exchange to foreign banks puts unnecessary pressure on the country’s balance of payments.”
He said the Bank of International Settlement (BIS), a bank for central banks, has reported that deposits held by Zimbabweans in offshore accounts stand at above $600 million.
Dr Mangudya, however, said statistics of deposits held by Zimbabweans at other banks that do not report to BIS were unknown.
“Externalisation or capital flight of this nature, which may be attributable to the use of mobile capital (foreign currency) as a medium of exchange and the lack of confidence within the domestic economy, has a net effect of robbing the country of its hard-earned foreign exchange and deprives the country of jobs and growth in output.
“This calls for greater introspection among those involved in this practice in order to bring back jobs,” he said.
The Governor said preservation of foreign exchange in nostro accounts by enforcing market and institutional discipline and domesticating the settlement of local card transactions on international card switches was crucial.
“This measure has been necessitated by the need to ensure that nostro accounts are used for foreign payments and that domestic transactions are settled locally through platforms such as RTGS, ZimSwitch, VISA, Mastercard, local mobile banking and/or cash and bond notes.
“Utilising nostro accounts to settle domestic transactions put unnecessary pressure on the country’s foreign exchange reserves that should ideally be used for international or offshore payments,” he said. The Chronicle