Businesses told to comply with bank rate

RESERVE Bank of Zimbabwe (RBZ) Deputy Governor Dr Kupukile Mlambo has urged captains of industry and businesses to comply with the foreign currency auction exchange rate and price reasonably to avoid arrests.

The foreign currency auction was introduced by Government last year as a regime where the allocation of a given amount of foreign exchange is determined through a bidding process.

Responding to questions during the CEO Africa Roundtable conference in Victoria Falls on Friday, Dr Mlambo said depending on the foreign currency auction rate businesses were allowed to charge slightly above to cater for other costs incurred.

"Why get money at a rate of ZW$97 and then charge at ZW$200?

"Those who get money from the auction system price reasonably for an example with the bank rate being ZW$97 or ZW$99 and you price at ZW$105 or ZW$110, why would we fight you. Off course you can charge slightly above the auction rate to cater for other costs incurred, like the bank will charge you to give you that money and there are other transfer charges," he said.

He said where the law would have been broken and it can be proved, as the Central Bank there was nothing they could do but let the unscrupulous businesses and dealers get arrested.

Dr Mlambo said the Bank's Financial Intelligence Unit (FIU) was working tireless to find out those who were breaking the law and abusing the auction exchange system.

He added: "Where incentives can help someone comply let us use that. I liked what the CEO Africa Roundtable chairman Mr Oswell Bimha said that they were not happy with the arrests but at the same time let us also comply. Let us find the balance there."

Dr Mlambo bemoaned abuse of a recently availed facility by Government where people are able to access US$50 per week at a bureau de change which had been envisaged would be helpful in enhancing access to foreign currency to individuals.

He said another challenge they had observed was lack of proper communication channels.

"We communicate policy through monetary policy statement. Announcements talk mostly to analysts, we need to talk to the ordinary Zimbabweans. We recently appointed a deputy director for PR and communication so that they can help make our policy pronouncements more understandable," he said.

Dr Mlambo also said sometimes there was a disconnect between what the Central Bank says and what banks told customers, and they were working on dealing with that.

He noted that the country was highly productive as seen with the advent of the Covid-19 pandemic where more companies moved to create products in a bid to import substitute.

Dr Mlambo said there was a need to import substitute that could be made in the country.

"Buy Zimbabwe is fine but it has to be of quality and good standard. Let us focus on production and put our resources where we can get maximum benefit."

In terms of the growth trajectory, he said Government has projected that the economy would this year grow by 7,8 percent GDP up from a decline of 5,3 percent in 2020.

Dr Mlambo said the rebound was anchored on good rainfall season for 2020/21, good sectoral performance, stable macro-economic environment (policy driven) and positive external sector performance.

Addressing delegates at the event Industry and Commerce Minister Dr Sekai Nzenza said the Government was implementing various initiatives anchored on the National Development Strategy 1 (NDS1) blueprint whose objective was to transform the economy through enhanced private sector led productivity.