Import with your own forex, Mangudya says

Companies and individuals seeking to import basic commodities following the lifting of the import ban will have to use free funds, freeing the central bank from having to raise funds for the imports, Reserve Bank of Zimbabwe governor John Mangudya has said.

Source: Import with your own forex, Mangudya says – NewsDay Zimbabwe October 26, 2018

BY TATIRA ZWINOIRA

With most basic commodities in short supply, while the prices of those available are shooting up daily, government sought to mitigate the scarcities by lifting the suspension of imports by suspending Statutory Instrument (SI) 122 of 2017, which regulated the importation of certain basic goods.

“Those people with their own money, including those people from the diaspora or anyone with his own money, can bring in products into Zimbabwe,” Mangudya told NewsDay.

“The idea is to increase supply, right? So how do you increase supply? You say those with money, import over and above the local production. Let those with their own money import because before, those with their own money were not able to import as there was a ban, so even if you had money in your pocket, you could not import. Now, they have removed the ban.”

He said this was a very positive move to increase supply and stabilise prices.

“We are going to continue to provide foreign currency for local producers. Over and above that, businesses can import the product to increase the supply of those products in the market. The whole idea is to ensure that consumers find products on the shelves so that there is confidence that products are available,” Mangudya added.

“For example, let us say you are in the diaspora, instead of bringing in your money as cash, you can bring it as goods and we know that each month, we get $60 million (average) from the diaspora. So, you will make more profit provided you bring the goods and the money.”

Mangudya confirmed that with the separation of the current accounts into nostro foreign currency accounts (FCA) and a real time gross settlement (RTGS) FCA, this meant those who fund the former can import, provided they fund the account.

Those with RTGS FCAs would rely on RBZ support to import.

Retail shops with a footprint outside Zimbabwe, especially in South Africa, as Zimbabwe’s biggest trading partner, are expected to benefit from the lifting of SI 122 of 2017.

These include TM Pick n Pay, as this is a combination of Meikles Limited’s supermarket division with South African retail giant Pick n Pay, and OK Zimbabwe, which also has a footprint in the neighbouring country.

Cross-border traders and consumers have welcomed the lifting of the ban, as they can now buy goods from outside.

The goods that can now be imported without restriction are animal fats, baked beans, body creams, bottled water, cement, cereals, cheese, coffee creams, cooking oil, crude soya oil, fertiliser, finished steel roofing sheets, wheat flour, ice cream and jams.

Others are ice-cream, jams, juice blends, margarine, mayonnaise, packaging materials, peanut butter, pizza base, potato crisps, salad creams, shoe polish, soap, sugar, synthetic hair products, wheel barrows and wheelbarrow parts, yoghurts, agro-chemicals, and stockfeeds.

However, Confederation of Zimbabwe Industries president Sifelani Jabangwe said this would negatively affect local production, as it starts “taking away demand from local industry”.

Confederation of Zimbabwe Retailers president Denford Mutashu said: “Local manufacturers have challenges and will require a lot of foreign currency, which currently may not be available. So I think as a short-term measure, this is a welcome development”.

COMMENTS

WORDPRESS: 1
  • comment-avatar

    In terms of Exchange Control ACt of 1961 it is illegal to own a bank account outside of Zimbabwe. Zw once again has a selective enforecement of the law – depending on who you are of coourse.