In a move aimed at stabilizing the local currency, Government has announced new measures to assert the value of the Zimbabwe Dollar saying government officials and parastatals will now collect fees in local currency.
In a statement yesterday, Finance and Economic Development Minister Professor Mthuli Ncube also revealed that the treasury will now fund the Zimbabwean dollar component of 25 percent foreign currency surrendered by exporters to eliminate the creation of additional money supply which has been a major factor in the currency’s depreciation.
“All Government agencies including parastatals will substantially now collect their fees in local currency Payments to ZESA by non-exporters will be made in local currency and all customs duty to be payable in local currency, with the exception of designated or luxury goods, and where the importer opts to pay in foreign currency.
“Treasury will now fund the Zimbabwe dollar component of the 25 percent foreign currency surrendered by exporters, in order to eliminate the creation of additional money supply. The foreign currency collected from the 25 percent that is surrendered, will now be collected by Treasury and used in servicing the foreign currency loans assumed from the Reserve Bank of Zimbabwe.
“Banks will no longer withhold any foreign currency surrendered by exporters, and all liabilities to the banks will be settled through Treasury. Government shall create a debt redemption fund to service other external liabilities in line with the arrears clearance programme. These will be funded through new levies and other resource mobilisation initiatives.
The Finance Minister also announced a cap on the amount available for auction and speedy disbursement of allotted funds.
“The weekly auction will be limited to a maximum of US$5 million. As from June 1, 2023, winning bids at the auction will be paid within 24 hours of award. There will be tightening of monetary policy in order to reduce lending and hence money creation by banks,” said Professor Ncube.
Professor Ncube added unused export earnings in private nostro accounts retained for three months will be converted to local currency and all manufacturers selling general goods will now be required to charge refundable Value Added Tax (VAT).
“All export proceeds that remain unused after 90 days will be liquidated onto the interbank market. The weekly auction will be limited to a maximum of US$5 million.
“There will be tightening of monetary policy in order to reduce lending and hence money creation by banks. All manufacturers selling general goods such as cement, milk, soft drinks etc for the export market will now be required to charge VAT which is refundable by ZIMRA after exporting”, he added.
Zimbabwe has been grappling with currency crisis with the Zimbabwe dollar losing value at an alarming rate. The government on the 2nd of May introduced additional measures to curb the further depreciation of the local currency and increases in prices of products marked in domestic currency. The measures included increasing the retention of domestic foreign currency sales to 100%, adoption of all external loans by treasury, increasing consumer’s access to basic commodities and promoting the use of domestic currency by Government Agencies.