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Zimbabwe exporters sound alarm over tough new forex rules
05 Jun 2025 at 11:34hrs | Views
Zimbabwean exporters are facing fresh turbulence following the government's move to tighten foreign currency controls - scrapping critical export incentives and enforcing tougher surrender requirements. The decision has triggered alarm across key sectors, with warnings that the policy could stifle production, dry up much-needed forex inflows, and derail Zimbabwe's fragile economic recovery.
The new regulations, which compel exporters to surrender 70% of their foreign currency earnings within 90 days and scrap existing incentives, have sent shockwaves through mining, agriculture, and manufacturing industries - already battling with high costs and policy uncertainty.
Speaking to Business Times, CEO Africa Roundtable chairman Oswell Binha described last Friday's exporters' conference as "a forum of grievances," where the mood among exporters was grim.
"What was meant to be a celebration of Zimbabwe's export drive turned into a chorus of discontent," Binha said. "Policy inconsistencies, structural inefficiencies, and now this punitive surrender policy, are collectively undermining competitiveness."
At the heart of the backlash is the mandatory 30% forex surrender to the Reserve Bank of Zimbabwe (RBZ) at the official exchange rate, which exporters argue is well below the parallel market value - leading to significant losses.
"Exporters operate in US dollars - inputs, fuel, freight, salaries. Forcing them to convert earnings into a volatile local currency that can't sustain operations is counterproductive," Binha warned.
He added that beyond forex rules, the export sector is weighed down by excessive production costs, erratic policy shifts, and an opaque regulatory framework.
Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro echoed those concerns, calling the export environment "complex and hostile."
"Our exporters are struggling with dollarized costs and high interest rates on ZiG loans, while affordable credit remains out of reach. The suddenness of policy shifts like this complicates planning and weakens business confidence," Karoro said.
He also criticized the Willing Buyer, Willing Seller system as lacking transparency, leaving many exporters locked out due to currency shortages.
Economist Eddie Cross was even more blunt in his assessment.
"There are no incentives for exporters anymore - only disincentives. Add high transport and power costs to the surrender requirement, and you're left with very little reason to keep exporting," he said.
Not all economists are sympathetic. Misheck Ugaro, Vice President of the Zimbabwe Economics Society, defended the government's position, arguing that a stable local currency (ZiG) eliminates the need for incentives.
"The government's job is to maintain macroeconomic stability, not to babysit inefficient exporters," Ugaro said. "If they can't adapt, they will be replaced."
But economist Dr. Prosper Chitambara offered a more measured view, calling the forex surrender requirement "an indirect tax" that erodes competitiveness.
"Even with ZiG's recent stability, the value loss from surrendering forex below market value is significant. It's particularly damaging during periods when the parallel market rate diverges sharply from the official one," Chitambara explained.
He warned that while some reforms may be necessary, they must be accompanied by structural support for the export sector, including access to affordable credit, energy stability, and transparent policies.
Economic analyst Victor Bhoroma said the policy could prove disastrous for already strained businesses.
"Our exporters are being squeezed. Production costs are rising due to power challenges, poor logistics, and currency losses. Now, they're being punished for earning forex," Bhoroma said.
He warned that Zimbabwean exporters are increasingly losing ground to regional competitors like Zambia and South Africa, where policy environments are more predictable and supportive.
Despite the uproar, the RBZ remains firm. Dennis Chirata, Deputy Director of the Bank's Export Division, said monetary tightening was non-negotiable.
"We have exited quasi-fiscal operations, including export incentives. Paying incentives now would reverse the gains made on monetary stability," Chirata told Business Times. "The focus is on controlling money supply to avoid a return to crisis."
Yet, some see potential for progress. ZimTrade board member and ZNCC vice president Josephine Takundwa acknowledged exporters' challenges but struck a hopeful tone.
"Exports are Zimbabwe's lifeline. Despite the hurdles, we've seen positive growth from 2023 to 2024. With continued reform and support, 2025 could be even better," she said.
She called for a collaborative approach - where government, exporters, and development agencies work together to improve conditions for trade.
As the government doubles down on stabilizing its currency and curbing inflation, exporters say the real price is being paid by the productive sectors that earn Zimbabwe its scarce forex. Their plea is not for handouts, but for fairness, consistency, and a policy framework that rewards growth - not punishes it.
Until then, Zimbabwe runs the risk of strangling its export base at a time it needs it most - turning its key foreign currency earners into economic casualties.
The new regulations, which compel exporters to surrender 70% of their foreign currency earnings within 90 days and scrap existing incentives, have sent shockwaves through mining, agriculture, and manufacturing industries - already battling with high costs and policy uncertainty.
Speaking to Business Times, CEO Africa Roundtable chairman Oswell Binha described last Friday's exporters' conference as "a forum of grievances," where the mood among exporters was grim.
"What was meant to be a celebration of Zimbabwe's export drive turned into a chorus of discontent," Binha said. "Policy inconsistencies, structural inefficiencies, and now this punitive surrender policy, are collectively undermining competitiveness."
At the heart of the backlash is the mandatory 30% forex surrender to the Reserve Bank of Zimbabwe (RBZ) at the official exchange rate, which exporters argue is well below the parallel market value - leading to significant losses.
"Exporters operate in US dollars - inputs, fuel, freight, salaries. Forcing them to convert earnings into a volatile local currency that can't sustain operations is counterproductive," Binha warned.
He added that beyond forex rules, the export sector is weighed down by excessive production costs, erratic policy shifts, and an opaque regulatory framework.
Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro echoed those concerns, calling the export environment "complex and hostile."
"Our exporters are struggling with dollarized costs and high interest rates on ZiG loans, while affordable credit remains out of reach. The suddenness of policy shifts like this complicates planning and weakens business confidence," Karoro said.
He also criticized the Willing Buyer, Willing Seller system as lacking transparency, leaving many exporters locked out due to currency shortages.
Economist Eddie Cross was even more blunt in his assessment.
"There are no incentives for exporters anymore - only disincentives. Add high transport and power costs to the surrender requirement, and you're left with very little reason to keep exporting," he said.
Not all economists are sympathetic. Misheck Ugaro, Vice President of the Zimbabwe Economics Society, defended the government's position, arguing that a stable local currency (ZiG) eliminates the need for incentives.
"The government's job is to maintain macroeconomic stability, not to babysit inefficient exporters," Ugaro said. "If they can't adapt, they will be replaced."
But economist Dr. Prosper Chitambara offered a more measured view, calling the forex surrender requirement "an indirect tax" that erodes competitiveness.
"Even with ZiG's recent stability, the value loss from surrendering forex below market value is significant. It's particularly damaging during periods when the parallel market rate diverges sharply from the official one," Chitambara explained.
He warned that while some reforms may be necessary, they must be accompanied by structural support for the export sector, including access to affordable credit, energy stability, and transparent policies.
Economic analyst Victor Bhoroma said the policy could prove disastrous for already strained businesses.
"Our exporters are being squeezed. Production costs are rising due to power challenges, poor logistics, and currency losses. Now, they're being punished for earning forex," Bhoroma said.
He warned that Zimbabwean exporters are increasingly losing ground to regional competitors like Zambia and South Africa, where policy environments are more predictable and supportive.
Despite the uproar, the RBZ remains firm. Dennis Chirata, Deputy Director of the Bank's Export Division, said monetary tightening was non-negotiable.
"We have exited quasi-fiscal operations, including export incentives. Paying incentives now would reverse the gains made on monetary stability," Chirata told Business Times. "The focus is on controlling money supply to avoid a return to crisis."
Yet, some see potential for progress. ZimTrade board member and ZNCC vice president Josephine Takundwa acknowledged exporters' challenges but struck a hopeful tone.
"Exports are Zimbabwe's lifeline. Despite the hurdles, we've seen positive growth from 2023 to 2024. With continued reform and support, 2025 could be even better," she said.
She called for a collaborative approach - where government, exporters, and development agencies work together to improve conditions for trade.
As the government doubles down on stabilizing its currency and curbing inflation, exporters say the real price is being paid by the productive sectors that earn Zimbabwe its scarce forex. Their plea is not for handouts, but for fairness, consistency, and a policy framework that rewards growth - not punishes it.
Until then, Zimbabwe runs the risk of strangling its export base at a time it needs it most - turning its key foreign currency earners into economic casualties.
Source - Business Times
