THE Reserve Bank of Zimbabwe (RBZ) is receiving less than US$300 000 daily from its reliable suppliers such as commercial banks and exporters further dampening the countr
y’s optimistic economic prospects.
This comes as the tobacco selling season has drawn to a close and clean-up sales being conducted to try and mop the little golden leaf left from farmers who held back, hoping that the Zimbabwe dollar would be devalued as promised by government.
All in all this has been the worst tobacco season since Independence in 1980 both in terms of quantity produced and crop sold on the tobacco auction floors as well as in foreign currency earned.
Efforts to get a comment from the RBZ on the country’s actual foreign currency situation have proved fruitless despite sending written questions to the central bank two weeks ago.
However, recent figures released by the central bank show that on October 30 it received US$100 000 which was all snapped up for various purposes, leaving it with nothing in its coffers.
On October 31 more currency was sent into the RBZ this time amounting to US$400 000.
Of this US$200 000 was used up, leaving a balance of US$200 000.
“The RBZ is now living from hand to mouth,” an economist said yesterday. “The foreign currency issue will remain a pain for the central bank as long as the issue of pegging of the Zimbabwe dollar is not solved.”
Economist and banker Andy Hodges recently said the RBZ needed to introduce more incentives, especially for the small-scale business sector which sold its foreign currency on the parallel market instead of through commercial banks.
“As long as there are no incentives for small-scale producers they will continue using the black market,” Hodges said. “We have been stuck with the $824 peg for too long a period and we hope the figure is changed soon.”
The RBZ figures show that on November 3 it received US$300 000 and used up US$500 000, leaving a negative daily balance of US$200 000.
The following day the central bank received US$500 000 and used up US$300 000 cancelling the overdraft made on the previous day.
However, on November 4 the RBZ did not receive any foreign currency at all.
The report comes less than a week after a nine-member taskforce comprising cabinet ministers was appointed to oversee the foreign currency issue.
The taskforce promised that it would come up with a “data bank” of information about who was abusing foreign currency or not sending it to the RBZ.
Analysts said the central issue as far as the foreign currency crisis is concerned was the continued pegging of the greenback at $824 against the Zimbabwe dollar by Finance and Economic Development minister Herbert Murerwa.
The US dollar is however going for $6 000 on the parallel market that has almost become the official market since individuals no longer bother sending their hard currency to commercial banks.
Commercial banks are also trading hard currency using parallel market rates – the more one has the better the figure one negotiates.
In its report for the period ending October 3 the RBZ said the Zimbabwe dollar depreciated against other major trading partner currencies such as the South African rand, British pound, euro, Botswana pula, Japanese yen and the Canadian dollar.
Tobacco, the country’s single largest foreign currency earner this year brought in US$179 million from 81,2 million kilogrammes sold.
In 2000 Zimbabwe sold 236 million kg of tobacco which is more than three times that sold this year.
Tobacco accounts for at least 35% of Zimbabwe’s total foreign currency earnings and in normal seasons bails government out of much-needed hard currency crunch.
Another major foreign currency earner – tourism – has also been hard hit because tourists are shunning the once popular destination.
The visitors cite lawlessness, government’s alleged abuse of the press and judiciary as well as its controversial fast track land resettlement programme as reasons for dumping the destination.
The Zimbabwe Tourism Authority meanwhile says Zimbabwe will this year earn US$75 million from tourism.
The country’s balance of payments deficit during 2002 pushed the economy into foreign exchange shortages.
The official exchange rate substantially eroded export sector earnings as Zimbabwe’s inflation continued to surge while that of trading partners remained generally subdued.
Following the new exchange control regulations, the foreign exchange trading has dwindled.
Furthermore, the grain imports required to avert mass starvation as a result of the cereal deficit in the country has resulted in increased pressure on Zimbabwe’s foreign exchange reserves.