RBZ measures hit car imports

Companies that import second-hand cars to Zimbabwe are feeling the pinch of the central bank’s measures to restrict the importation of non-essential products, with indications showing a decline in the volume of imported vehicles.

Source: RBZ measures hit car imports – NewsDay Zimbabwe October 12, 2016

BY TATIRA ZWINOIRA

In May, the Reserve Bank of Zimbabwe came up with a four-tier import priority list for the efficient use of foreign exchange resources, with a bias towards supporting the productive sectors of the economy and reducing the import bill.

The two main second-hand car export companies into the country are Japan-based BeForward and SBT Japan.

A source at BeForward told NewsDay yesterday the company was advising customers to register with a local bank [name supplied], whose processing time for payments was faster than other financial institutions.

“You have to open an account with a local bank because that is the only bank sending money to Japan at the moment without any hassles. Other banks take longer, maybe up to five months,” the source said.

Due to growing cash constraints owing to the shortage of the United States dollar, the central bank came up with the import priority list to keep as much money in the country.

The list was grouped into four parts, priority list one to three and non-priority, the latter is where imported vehicles fall under.

With this list in place, those wishing to import vehicles now have to go through a rigorous process, which involves getting approval from the central bank, a process which can take up to five months. The process involves extreme vetting to ascertain the reason and nature of the purchase.

A source at SBT Japan also confirmed that customers were transferring funds to Japan through a local bank, which had provided less hassles.

According to the sources, an invoice is issued in Japanese yen to a customer, who takes it to their bank, where United States dollars in the account are converted into yen and remitted to Japan.

The sources said transfers were also being done from Zambia National Commercial Bank Plc in Zambia or FNB in South Africa.

The Motor Industry Association of Zimbabwe president, Luckson Gwara said what this meant was that those wishing to own vehicles would be disappointed.

“From a general public perspective, these are the only vehicles they (motorists) can afford and would obviously want to own a vehicle of their own. So if they cannot purchase it … you can just imagine,” he said.

“Ordinarily, if we were manufacturing cars now, it was going to be a good thing, but because our production has not taken off, you are looking at a scenario where people are having a bit of constraints in terms of movement.”
Players in the motor industry estimate about 42 000 second-hand vehicles were brought into the country between January and August this year.