Dispora rescues Zim, sends US$1b: RBZ

via Dispora rescues Zim, sends US$1b: RBZ – NewZimbabwe 04/02/2016

EXPAT Zimbabweans living and working in countries such as SA, the UK and the US sent nearly $1bn back home in 2015, accounting for nearly half of foreign inflows into the cash-starved economy.

The country is battling a liquidity crunch that has been worsened by growing weakness in the currencies of major trading partners, the South African rand and Chinese yuan.

Reserve Bank of Zimbabwe governor John Mangudya said on Thursday there had been an increase in instances of illegal externalisation of funds by both individuals and companies.

“The current scenario in Zimbabwe — for example, where firms, especially those in the extractive sectors, and individuals are externalising funds, including export sales proceeds — defies economic logic,” he said in his Monetary Policy Statement for 2016.

Remittances by Zimbabweans in the diaspora amounted to $935m in 2015, he said, “which is about 48% of total remittances, which were about $2bn” during the same year.

The central bank said that in 2015, however, as much as $684m was externalised by individuals for various purposes that included donations, investments and account transfers.

Externalisation worry

“In addition, $1.2bn in export sales proceeds were externalised by firms,” the central bank said.

Zimbabweans have also been shunning the formal banking sector although profitability in the industry had improved, with about 15 banks notching up $127.4m in aggregate net profit. Only three banks made losses in 2015, said the policy statement.

The losses by the three banks have been attributed to “increased provisioning for bad and doubtful debts” which “however, weighed down on their performance,” resulting in losses.

Bad loans and defaults are also on the decline, with the nonperforming loans to total loans ratio declining markedly from 20.45% in September 2014 to about 10.87% by the end of December 2015.

The central bank has also now put in place measures to promote the usage of plastic money and online banking. It has also sought to tighten policy measures on usage and carriage of large amounts of cash by both businesses and individuals.

“Prior reasonable notice of not less than a day should be given to financial institutions for all cash withdrawals of an equivalent amount of above $10,000,” Mr Mangudya said.

Zimbabwe is forging ahead with reforms of its banking sector to improve stability and transparency, and a bill awaiting President Robert Mugabe’s approval will jail reckless bank managers in the event of bank collapses.

Zimbabwe has been hit with bank failures in the past four years, most of them blamed on poor corporate governance and insider loans.

COMMENTS

WORDPRESS: 2
  • comment-avatar
    Clive Sutherland 5 years ago

    QUOTE”Reserve Bank of Zimbabwe governor John Mangudya said on Thursday there had been an increase in instances of illegal externalisation of funds by both individuals and companies”

    How can this be illegal? The US$ does not belong to Zimbabwe!!!

  • comment-avatar
    amina 5 years ago

    Policy statement regarding externalisation is copy and paste from previous statements while Zimbabwe had its on currency. I have not seen any where where USA agreed that Zimbabwe should use its currency despite Mugabe speaking negatively of the USA yet his pockets and bank accounts are full of the $, what level of hypocrisy is that. Well there is no externalisation on currency that does not belong to you. What is the currency of Zimbabwe, does Zimbabwe government allow anyone to leave the country with any currency?