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Prosper Ndlovu, Business Editor
THE Reserve Bank of Zimbabwe (RBZ) has outlined a criteria for companies that could benefit under the new export incentive scheme.

The apex bank has recently come up with a range of measures to boost domestic economic growth with a bias towards exports. The initiatives include increasing the export incentive from five percent to above 12 percent on a case by case basis.

Several firms have benefitted from the initial five percent export incentive scheme, which was introduced in May last year under the bond note facility backed by a $200 million Afrexim Bank loan.

“Given the need to increase production and exports, the Exchange Control is receiving a number of requests from companies that are requesting for an export incentive of more than five percent,” said the RBZ in a notice to the Confederation of Zimbabwe Industries (CZI).

“Most companies are of the view that an export incentive in excess of five percent will make their products competitive on the export market and will also enhance capacity utilisation.”

A proposal has already been approved to extend the export incentive scheme by another  $300 million facility. Recent figures show that Zimbabwean exports have spiked $4 billion with the trade deficit also narrowing as local production gains traction.

To that end, the central bank said it would, through the Exchange Control Unit, do a thorough analysis of the submissions from the companies with a view to ensuring that the objective of increasing production and exports is attained. As such the RBZ has since come up with an outline of key considerations for qualifying firms.

In order for an informed decision to be made on requests for consideration of export incentive in excess of five percent, applicants should furnish the Exchange Control with relevant information through their bankers. T

his includes motivational submission from the company clearly outlining the objectives and strategies for the company as well as the impact of the requested export incentive on value chains. Eligible firms should also provide latest audited financial statements or management accounts to ascertain the financial performance of the company.

Other requirements include cash flow projections assimilating different levels of the export incentive including the five percent export incentive and current production levels of the company and associated production costs.

The applicant also needs to show levels of imports being included in production and levels of locally sourced raw materials being put into production plus current export markets supported by statistics, where available.

Further the information pack must show potential export markets for companies desiring to venture into the export market, external competitors and the prices of the products being offered on the regional or international markets (attach proof of the price differentials) and indicative timelines when the company is in need of an export incentive in excess of five percent.