Business / Economy
'Zimbabwe will soon run out of money,' says Bankers
05 Aug 2014 at 12:21hrs | Views
Bankers Association of Zimbabwe (Baz) has warned that Zimbabwe will soon run out of money to sustain imports.
Joseph Mverecha, Agribank divisional director, speaking on behalf of Baz president Sam Malaba at the Gweru Agricultural Show business conference last week, said Zimbabwe's depressed economic performance was ominous.
"The trade deficit that we are experiencing, sooner or later, we will run out of money to finance it," Mverecha said.
He said since 2010, Zimbabwe's import bill had ballooned from $1,5 billion to about $6 billion in 2014.
"Since dollarisation, our current account has drastically increased and at some stage we will fail to pay for those imports," Mverecha said. He predicted that the country would witness a decline in imports soon.
The influx of imports into the economy has been met by insignificant exports which are largely in raw form, hence noncompetitive on the international market.
Imports in Zimbabwe increased to $528,18 million in June of 2014 from $510 million in May of 2014.
Mverecha said Zimbabwe needed fresh money to shore up the economy.
"We need fresh capital into the economy," he said.
Zimbabwe has failed to attract the much-needed foreign direct investment (FDI) due to a cocktail of government policies hostile to investors, chief among them the Indigenisation and Economic Empowerment Act, which requires foreign firms to cede 51 percent to locals.
Joseph Mverecha, Agribank divisional director, speaking on behalf of Baz president Sam Malaba at the Gweru Agricultural Show business conference last week, said Zimbabwe's depressed economic performance was ominous.
"The trade deficit that we are experiencing, sooner or later, we will run out of money to finance it," Mverecha said.
He said since 2010, Zimbabwe's import bill had ballooned from $1,5 billion to about $6 billion in 2014.
"Since dollarisation, our current account has drastically increased and at some stage we will fail to pay for those imports," Mverecha said. He predicted that the country would witness a decline in imports soon.
The influx of imports into the economy has been met by insignificant exports which are largely in raw form, hence noncompetitive on the international market.
Imports in Zimbabwe increased to $528,18 million in June of 2014 from $510 million in May of 2014.
Mverecha said Zimbabwe needed fresh money to shore up the economy.
"We need fresh capital into the economy," he said.
Zimbabwe has failed to attract the much-needed foreign direct investment (FDI) due to a cocktail of government policies hostile to investors, chief among them the Indigenisation and Economic Empowerment Act, which requires foreign firms to cede 51 percent to locals.
Source - Dailynews
