adminBAZ president Mr John Mushayavanhu made the revelation at the inaugural Zimbabwe National Chamber of Commerce VIP lounge meeting in Harare on Tuesday evening. The meeting was focusing on liquidity challenges in the economy.
Mr Mushayavanhu said although most of the modalities had been completed, shipping agents were concerned about what they termed “reputational risk”.
“At the end of last year we travelled to the United States as BAZ and engaged Federal Reserve Bank officials over the importation of coins and they were agreeable as long as they were dealing with the private sector (BAZ) and not the Government.
“However, it was when we were working out the shipment of the coins to Zimbabwe that we realised that the shipping firms were not willing to facilitate the shipment because of what they said were ‘reputational risks’ in doing business with the country,” said Mr Mushayavanhu.
Mr Mushayavanhu said they had intended to import coins to the tune of $5 million, which they considered adequate for the local market.
“Although bringing in the coins was going to come at a huge cost to us as BAZ we were willing to meet the costs,” he said.
In the 2011 Mid-term Fiscal Policy Review, Finance Minister Tendai Biti reported progress with regards to the importation of coins. However, in the 2012 National Budget presentation, he hinted on the need to “overcome some of the logistical challenges involved”.
Since the introduction of the multi-currency system in 2009, consumers have been struggling to get change with retailers either compelling them to buy small items such as sweets or to accept credit notes.
The retailers also declined an offer by the BAZ to accept South African rand coins to the tune of R8 million, which had been accessed from the South African Reserve Bank.
The major stumbling block was that retailers were insisting on accessing the rand coins using the 1:10 exchange rate between the US dollar and the rand, while banks were only willing to use realtime exchange rates for fear of making exchange losses.
While other mitigatory measures such as encouraging an increase in the use of plastic money and mobile banking facilities are being pursued actively, these have however been stalled by the fact that there is a general lack of confidence in the banking sector.
This has seen a large segment of the population remaining unbanked. Meanwhile, the BAZ president urged Government not to compel banks to loan out money as this increases their vulnerability.
“You cannot legislate on the loan-to-deposit ratio because excessive loaning out of money leaves the institutions exposed. This is especially so because Government is the largest depositor in these banks and it causes problems when they need to withdraw to finance projects.
“Besides, the Exchequer Account should be held by the Reserve Bank of Zimbabwe and not with commercial banks. Government should resolve whatever issues it has with the RBZ,” said Mr Mushayavanhu.
Bank loaning has been considerably high with the average loan-to-deposit ratio for December 2011 having gone up to around 80 percent, official statistics show.
Online Reporter