Harare - The Reserve Bank of Zimbabwe (RBZ) maintains the country's backlog in outbound payments for companies has been reduced, although executives say firms are still facing procurement hurdles for goods and raw materials sourced abroad.
Foreign currency shortages have exacerbated Zimbabwe’s economic situation, leading to cash shortages and bank queues. But the biggest challenge in the country's liquidity crisis has been delayed offshore payments by companies.
Finance managers also said foreign shareholders have been failing to get dividends out of Zimbabwe on time. But the RBZ said on Wednesday that the foreign payments backlog has improved, following stable earnings from tobacco and mineral exports.
“The Bank’s allocations… have also reduced the foreign payments backlog by more than 50 percent to the current level of US$185 million,” RBZ governor John Mangudya said on Wednesday night.
The central bank said the liquidity crisis has improved somewhat “as a result of the increased foreign exchange earnings from agriculture and mining”.
The Africa Export-Import Bank (Afreximbank) has also availed a facility to stabilise international (nostro) accounts held by local banks to facilitate international transactions for local clients.
Mangudya said the facility by Afreximbank has since the second week of April 2017 been able to allocate $100m into the national economy on a weekly basis. Sources in Zimbabwe said the backlog had mounted to over $1bn in the past few months.
This has enabled Zimbabwe to meet various foreign exchange demands which include essential imports and payments, feedstock for industrial production and discharging outstanding foreign payments obligations, the RBZ chief said.
Although Zimbabwe has been raking in foreign currency from tobacco sales, farmers have been bearing the brunt of cash shortages in the local banking system. Zimbabwe has however suspended a 10% withholding tax on tobacco earnings for farmers, boosting their income which would have been cut by 10%.
They have been asked to open bank accounts but banks are unable to meet the demand for cash from depositors, with local bond notes failing to improve the cash shortages in the country.
In the current auctioning season Zimbabwe has grossed as much as $200m from tobacco sales. However, mining and other industry executives in Zimbabwe say foreign payment delays are disrupting operations.
“We still have a sizeable backlog of foreign payments and more often raw material shipments are delayed owing to delays in processing payments,” said an executive with a Zimbabwean manufacturing company last week.
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