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VP Emmerson Mnangagwaon

Prosper Ndlovu, Business Editor
ACTING President Emmerson Mnangagwa says the prevailing cash shortage in the economy would be over by the end of the first quarter of the year with more foreign exchange streams expected to boost liquidity.

Depositors have been struggling to access their cash at banks since April last year while several companies suffered delayed foreign payments due to United States dollar shortages and the resultant depletion of nostro reserves.

The situation had induced a strain on the economy and compromised consumer spending until recently when the Reserve Bank of Zimbabwe injected about $73 million in bond notes, which have eased demand for hard currency.

In his remarks during a tour of milling companies in Bulawayo Thursday, Acting President Mnangagwa called for calm as measures were being put in place to restore normalcy.

“The foreign exchange issue is quite universal in the country but we believe that by the first and second quarter that situation will improve as a result of the coming onto the market of tobacco,” he said.

Tobacco has over the years been a significant foreign exchange earner with the country having received $933 million from the export of the golden leaf alone by end of 2016 up from about $800 million in 2015.

The central bank has already indicated that tobacco auction flows would be opened earlier this year while harvesting of irrigated tobacco is already on course with more farmers having registered for the rain-fed growing season.

The Acting President said indications were that there would be other inflows coming into the economy from the first quarter moving into the second.

“Several projects are progressing and during the first and second quarter of the year some of these projects will begin to see financial closure, which then funds flow on the FDI (foreign direct investment) sector. We also know that from the Diaspora sector, again funds are going to increase. Also FDI this year we believe will be more than last year as a result of several projects that are being processed now,” he said.

“On the fourth inflow relates to multi-lateral as well as bilateral relations, which we have. Sourcing, procuring and acquiring lines of credit from other countries and or international institutions is being looked at. We are very positive that these things are going to improve during the course of the year.”

Experts blame illicit financial flows such as money laundering and externalisation as well as a bloated import bill at an average $3 billion per year, for haemorrhaging the scarce foreign exchange in the economy.

The apex bank had to introduce a $200 million bond notes as an export bonus scheme for producers as a measure to boost domestic production.

The facility is backed by a $200 million Afreximbank loan and would be drip-fed into the market in tandem with the value of exports.

The Acting President urged Zimbabweans and businesses to have confidence in their country and work closely with the Government in developing a robust economy.

“If people have the confidence then they don’t hold back but open up and by doing so we actually attract more and more confidence, not only internally but externally. So it’s important that we continue to go around and discuss with stakeholders in the economy. The dialogue that has started between the industry and the Government will help us understand you and you understand us and create an environment where you can prosper and expand to other regions and this is very critical of us,” he said.