Govt says foreign investors have greenlight to repatriate profits

GOVERNMENT says foreign investors will have a special dispensation to repatriate all their profits and dividends back home despite an acute shortage of dollars that has forced the Reserve Bank of Zimbabwe (RBZ) to implement a raft of measures to plug currency leakages, an official said on Thursday.

Zimbabwe’s cash crunch has exacerbated over the past few weeks on the back of declining exports and panic withdrawals following the Reserve Bank of Zimbabwe interventions ostensibly to stimulate exports.

Fast running out of options to stem the growing cash crisis, government moved to propose introduction of bond notes and other measures to plug currency leakages to ease the liquidity situation that resulted in low business activity.

The market has been jittery since then as fears of the return of the demonitised local currency resulted in a run on banks. There are also fears of an explosion of black market due to excessive exchange controls, renewed instability in the banking system and currency inconvertibility problems.

RBZ deputy director in charge of exchange control Farai Masendu told delegates attending a Financial Markets Indaba in the capital that foreign investors, would be able to freely send their money across the border.

“Where an investor has declared a dividend and you have a profit remittance that you want to make, in terms of our foreign payments, that receives priority,” Masendu said.
“You are able to remit 100% of your profits and dividends.”

The move is expected to ease investor fears following announcements by the central bank that it would regulate imports.

Masendu said exports currently account for 55% of the country’s foreign earnings, followed by diaspora remittances at 29% and external loans and foreign direct investment respectively.
Masendu said FDI should take a pole position in foreign earnings.

“Over the years, FDI has not performed as expected,” said Masendu.

“We have had to look at our status as one of the key issues was to liberalise our markets in line with regional frameworks,” added the RBZ deputy director.

So far, government has increased the maximum threshold of foreign ownership of the stock exchange for individuals and corporates to a maximum of 49% in line with the indigenisation policy.
Masendu also said government was prioritising profit remittances to foreign investors as a means of boosting confidence and attracting foreign capital.

Last month the central bank set priorities for imports and imposed limits on cash withdrawals in an effort to ease an acute shortage of money.-Staff Writer