Loans gobble auction money

Ngoni Chanakira

THE Reserve Bank of Zimbabwe (RBZ) says from the US$778,6 million it has received from the weekly auctions, the majority has gone towards repayment of outstanding loans.


RBZ governor, Gideon Gono, said US$151,1 million had been used for central bank loans and “other” priorities.


The “other” priorities were not, however, specified.


“In carrying out its function, special attention is placed on the pressing needs of the productive sectors, so as to stimulate a meaningful supply response,” Gono said when presenting his monetary policy statement review for the second quarter to June 30.


“In terms of usage, US$778,6 million was received during the first half of the year.”


Raw materials accounted for the second highest amount of the foreign

currency allocations, taking up US$128,4 million.


“As your central bank, part of our statutory mandate is to discharge the efficient management of the country’s foreign exchange resources, ensuring that there is optimal allocation of the scarce resource among competing needs of the country,” he said.


Government ministries gobbled US$90,1 million from the auctions for various items.


Gono did not specify what these items were.


“It is important to note that over and above the total foreign exchange availed to the productive sectors through the Reserve Bank via the auction system and other direct allocations, the productive sectors had access to additional foreign exchange through utilisation of their foreign currency account (FCA) balances under the foreign currency retention system,” he said.


Sectors that received a substantial amount of foreign currency include machinery US$38,1 million, spares (US$29,9 million), motor vehicles (US$17,9 million), chemicals (US$11,1 million), loan repayments (US$6,8 million) and gold producers (US$24,7 million).


He said the first six months of the year had seen a considerable stabilisation of the energy supply situation throughout the country.


“Shortages of fuel had caused untold suffering to the commuting public as well as impaired business operations,” Gono said. “Against this background, the Reserve Bank, in close consultation with the Ministry of Energy and Power Development, attaches immense priority to fuel procurement.”


However, fuel supplies have been haphazard and the country is still not receiving the required amounts.


Some service stations have gone for weeks without receiving any supplies from their normal sources.


Gono said over and above the US$80 million allotted for fuel imports on the foreign exchange auction, the RBZ availed an additional US$51,8 million to Noczim over the period December 2003 to June.


He said the increased involvement of the private sector in procurement of fuel was expected to enhance stability in fuel supply.


“Lasting stabilisation of the fuel sector also requires that the country effectively utilises the existing Beira pipeline infrastructure,” Gono said.

The struggling Zimbabwe Electricity Supply Authority was given US$22,6 million from the auction, while the Grain Marketing Board received US$700 000.


Zesa utilised the amount for long outstanding debts to neighbouring creditors such as Mozambique, South Africa and the Democratic Republic of the Congo as well as for the importation of power and spare parts.


“Given the central nature of electricity energy to the achievement of economic growth and development aspirations of the country, greater priority is being given to Zesa in terms of foreign exchange allocation,” Gono said.