What is happening to diaspora forex?

FIGURES released by the Reserve Bank of funds flowing from the diaspora since the introduction of the Gono/Bloch “auction rate” initiative provide interesting reading.

erif”>The Financial Gazette (June 10) reported that as much as US$16 million (a little later “an estimated US$20 million”) has been received since the new measures were introduced. The Zimbabwe Independent (June 11), reports Gideon Gono’s announcement that an average of US$750 000 a day was being recovered, with “some agencies sometimes receiving as much as a million US dollars in one day”.

And I read with interest the statement by RBZ exchange control division chief Moris Mpofu (Zimbabwe Independent, June 11, page 17) that all foreign currency mobilised under these arrangements will be directed for auctioning at the currency exchange.

But is that actually happening? Let us consider. An average of US$750 000 a day builds to a weekly (six-day) total of US$4,5 million or a monthly total of US$20 million. Interesting, and good news for Zimbabwe. But since the introduction of the “diaspora channel”, the twice weekly forex auction has had its “amount on offer” increased only by US$500 000 (US$8 million to US$8,5 million from May 17), a total of US$1 million a week or US$4,5 million in a month.

I realise, of course, that these are early days, and I am sure Gono is preparing, as soon as a pattern is established, to increase the amount on offer commensurately with the level of funds received each week.

However, it will be interesting to see how long it will take before the amount on offer rises to US$10 or US$12 million twice weekly to cater for the US$20 million apparently now being received.

On another tack, I note that many bids are turned down at the auctions: in the six weeks from May 3 to June 10, in fact, 3 711 bids totalling US$57 million or so were refused against the US$100 million allotted. Some unsuccessful bidders will no doubt reapply, perhaps successfully.

The remainder? And there must be many others unable to provide them information necessary to allow them to apply to the auction for forex. If this US$20 million increase were made readily available for all, how much more successfully this country would be able to face the task of recovery. And many more Diaspora dwellers might be persuaded to move their forex back home.

If the twice-weekly amount on offer were not increased in line with the amounts being received daily according to Gono, one might be inclined to ask where the unoffered balance was going and what it was being used for? And one might then have to counsel those in the diaspora to consider whether, in happily sending their funds back to Zimbabwe through this means, they might perhaps be funding the purchase of grain through the back door to fill GMB granaries for issue to starving voters next March (if they vote Zanu PF, of course), or for a host of other useful purposes – for one party only.

PNR Silversides,