Forex inflows hit $6 billion

Zimbabwe's foreign currency earnings for the year to date have hit the US$6 billion mark, from US$4,6 billion realised in the whole of last year as the country's exports and Diaspora remittances continue to grow buoyed by interventions by the new dispensation.

The statistics were revealed by Reserve Bank of Zimbabwe Governor Dr John Mangudya, when he appeared before the Parliamentary Portfolio Committee on Power and Energy yesterday, which sought to understand the reasons behind fuel queues that continue to dog the economy.

Dr Mangudya said the earnings were quite high compared to other African economies like Rwanda whose annual exports stand at US$1,8 billion and the second largest populous country on the continent — Ethiopia — which  realises about US$2 billion annually.

The benefits of this growth are, however, not at face value for the ordinary man as the increase in earnings continues to be dwarfed by the increase in imports as the economy remains consumptive.

Besides, the pro-business policies of the new dispensation have seen a number of companies' foreign currency demand increasing on the back of a need to import spares and new machinery.

"We are very happy Mr Chairman to report that the export incentive has worked wonders in this country," said Dr Mangudya.

"We have noticed that exporters have been able to respond very positively. To give you numbers, our exports have increased by about 26 percent in 2017 and as at to date, they have increased by another 25 percent. If you talk about 25 percent increase in exports, throughout the world, it's a very significant amount of money.

"To give you numbers Mr Chairman, as of to date, foreign currency that has come into the country this year alone is US$6 billion. From exports, from Diaspora remittances of which about US$4 billion is coming from exports," he said.

Going forward, Dr Mangudya said the challenge is to grow the earnings to meet the pace at which imports are growing and most importantly come up with import substitution strategies, where ever possible so that the country does not use the much needed foreign currency on goods that can be made locally such as cooking oil.

Shurugwi South Member of Parliament Honourable Edmund Mukaratigwa, also challenged the central bank to consider other interventions other than the bond note incentive scheme to further boost foreign currency earnings to at least US$10 billion per year.

Speaking before the same committee, Dr Mangudya, assured parliamentarians that the country will not run out of fuel this festive season as sufficient allocations for fuel purchases will continue to be availed.