Foreign payments backlog nears $600m, says RBZ

Foreign payments backlog nears $600m, says RBZ
The Reserve Bank of Zimbabwe

The Reserve Bank of Zimbabwe

ZIMBABWE’S international payments backlog has surged by over 200 percent to $570 million, from $186 million in May, central bank governor John Mangudya has said, as the country’s foreign exchange shortages intensify.

The Reserve Bank of Zimbabwe (RBZ) governor last week told The Financial Gazette that he expected the situation to ease by mid-month as government begins drawing down on a $600 million nostro-stabilisation facility from the African Export Import Bank (Afreximbank). The country which uses a basket of currencies including the United States dollar, South African rand and local bond notes, among others  is battling a foreign exchange shortage that appears to have worsened since the closure of the tobacco selling season last month.

The shortages have resulted in a backlog of foreign payments, which has forced a number of companies to source hard currency from the black market to meet their foreign obligations. “There are two forms of foreign payments those backed by resources and a wish-list, were people want to repatriate but there is no money. So those backed by money in their accounts currently stands at about $220 million, while the wish list around $350 million.

So, if we add these with those which have no money backing them, the total comes to $570 million. That is our backlog,” Mangudya said on the side-lines of a meeting between business and President Robert Mugabe at State House. Mangudya said the $600 million nostro stabilisation facility from Afreximbank was a desperately needed reprieve. “We are looking for foreign currency to meet some of the challenges and we hope that by mid of this month, we will have drawn down the Afreximbank nostro stabilisation facility to meet some of the critical payments that you have given us and we are going to continue exporting our gold and platinum. I remain optimistic things will be contained with the coming on board of the facility,” he said.

Last week, Mangudya announced that about 67 correspondent banks had dumped the country in a de-risking exercise. In June, the number of correspondent banks Zimbabwe stood at 50. He said the country’s risk profile was working against it as correspondent banks ― supposed to clear payments between local financial institutions and foreign suppliers ― were moving to minimise Zimbabwean transactions in a risk skirting move.

As a result of the payment delays, government has drawn up a priority list for foreign payments and imposed a ban on some imports it deems to be non-essential in a bid to ration the little available foreign currency. Most businesses are buying foreign currency on the black market at a premium to facilitate imports as the situation continues to deteriorate. Over the past few months, cash premiums have risen from about 10 percent to the present 35 percent for high value notes.

newsdesk@fingaz.co.zw

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  • Idiot

    RBZ living on Hope? Ye gods

  • Todyamarara

    Economics 101 first semester
    Dr Mangudya there is real economic activity that is resulting in real production which is then exported (tobacco, platinum, gold, etc) , these activities earn hard currency as does tourism wherein people come into the country and spend hard currency, payment transfers are another source of hard currency….everything else is feja feja Zim style productivity.. where a teacher is deemed to have earned hard currency by teaching children whose parents are deemed to have paid fees in hard currency ….Mapuno abva kwa Mutoko anonzi USD20 a bucket?? your retailers are importing stock that can be locally made… but is cheaper to import because local producers are charging greenback?? You introduced the bond note that is supposedly equal to the USD but that has simply created a parallel market for currency….I hope I have helped you understand where you are… as a man sit down and think how you got there.. as a patriot throw in the towel you are a joke the whole lot of you..

  • Dopori

    These buggers, including Mangudya, are reactionary, only thinking about solving problems that were created yesterday, today, and not being proactive enough and thinking about solutions for those problems in today’s terms, but also in the wake of tomorrow’s demands and beyond. Methinks it’s all about politics, and survival on the part of these buggers know nothing about survival outside politics. Everything else will then fall into place once the said politics has been sorted out. Let ZanuPF members keep on fighting each other and amongst themselves and a new dawn will be ushered in Zimbabwe.

  • kwv

    I am reminded of a time long ago when the firm I was with tendered for electrical equipment to Zambia. We won some of these tenders, including one for a broadcast transmitter.

    The Zambians started to press us on when we would deliver. At that time Zambia had what they called the “pipeline” for foreign currency payments; you submitted your request and then if you were lucky you money eventually popped out of the pipeline.

    We told them we could not accept this and it was cash with order – or nothing.

    The problem of course was that they had run out of money. Zimbabwe is in exactly the same position except that the chance of any money entering the pipeline is remote. The reason for the Bond Notes is that there is No Real Money, so once again the country has to rely on hollow promises.

    Pretty well everyone knows exactly WHY there is no money, it is not a mystery at all. And yet almost daily we hear of immensely costly foreign shopping trips that bring no benefit, or expensive cars for traditional chiefs, ministers and other non-productive people.

    The economy of a country is no different from the economy of a household; you have to earn more than you spend.

  • Wilson Magaya

    There is a way out but no matter what we do now, it’s going to get harder, much harder before it gets any better. Bite the bullet.

  • nelson moyo

    We, in Zimbabwe, must first learn to cut our coat according to our cloth.
    For those people who do not understand simple economics this means that if we earn one dollar we cannot spend more than one dollar.
    It would seem that most Zimbabweans, although very clever at bookwork, are unable to grasp this basic principle in life.
    Failure to understand this age old rule will mean that the Zimbabwe Bond Note will become the Zimdollar Mark 2 – even if Doctor John “Bond” Mangudya thinks otherwise

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