Finance minister Patrick Chinamasa sees a huge foreign currency earnings from this year’s tobacco crop, an easing of the country’s liquidity situation and an improvement in foreign payment hurdles.
Chinamasa’s remarks come at a time the country is facing crippling foreign payment problems affecting the purchase of raw materials due to dry nostro accounts.
“This is why we are looking for inflows from the sale of our tobacco. I am anticipating a bigger crop from tobacco because the season has been good.
So I have high prospects for a greater output from tobacco especially from foreign currency earning.As you know because of the 5% incentive it has actually motivated tobacco farmers to increase their crop,” he said.
Chinamasa’s comments come after last year’s statistics from the Tobacco Industry Marketing Board show that as of December 29 2016 a total of 164,5 million kg of tobacco valued at US$933,6 million has been exported to various destinations across the globe.
Stakeholders in the tobacco industry have pegged this year’s golden leaf output at 200 million kg despite indications excessive rains may militate against a better yield.
Local banks have been blamed for prioritising non-essential payments ahead of crucial raw materials when processing foreign settlements, but Chinamasa said this is all because of the shortage of foreign currency.
“As you are aware, there are six products that contribute to our foreign exchange earning that is tobacco, gold, platinum, ferrochrome, nickel and we are working very hard now to resuscitate diamonds. If banks have no foreign currency and there is a client who wants to pay for raw materials don’t blame it on them,” he said.
Chinamasa said there were measures to manage the foreign currency system that will ease the problem of foreign currency allocation.
“As you know, all exports were channelled through the Reserve Bank of Zimbabwe. But we have moved now towards a managed foreign currency where any exporter who exports cedes 50% of foreign currency to the central bank for use by other players who are into imports. The other 50% is given to the exporter and raw materials and for the bank to give its customers. That process has already started and we think that the problems you have mentioned are legitimate and will be sorted out sooner rather than later,” Chinamasa said.
RBZ governor John Mangudya last year lobbied for the early opening of the golden leaf’s marketing season, saying it is crucial in oiling the country’s nostro accounts.
With the golden leaf final crop assessment expected any time from now, indications are that this year’s marketing season will be open earlier than last year.
According to Chinamasa, government has so far allocated US$42 million in cotton farming as it seeks to revive the crop’s production from doldrums.
“You may also need to know that starting with this year’s cotton crop we are also going to pay 5% incentive. I am motivated by the investment that we have done in cotton production which is US$42 million. The assessments of the crop are very encouraging,” he said.