CZI engages RBZ over oil imports

Golden Sibanda in Bulawayo
The Confederation of Zimbabwe Industries has requested the Reserve Bank of Zimbabwe to put crude cooking oil on the list of critical imported products to facilitate faster payments to foreign suppliers.

This comes as cooking oil manufacturers are struggling to secure key raw materials from foreign suppliers due to problems involving the situation at local banks nostro accounts.

A nostro account is a bank account held in a foreign country by a domestic bank mainly to facilitate settlement of exchange and trade transactions.

CZI president Busisa Moyo said, in an interview on the sidelines of the ongoing Zimbabwe International Trade Fair, that manufacturers have been importing crude cooking oil, but the challenge their facing at the moment was that payments for the key input are no longer going through.

Zimbabwe has a monthly requirement of about 12 million metric tonnes of cooking oil and if payments to suppliers continue to be delayed; it may face shortages.

“We would need to import 10 million to 12 million litres per month, but right now the imports are very low.

There are three cooking oil imports for the oil industry, soya bean, sunflowers or crude; a semi-processed oil we then bake and refine,” he said.

Mr Moyo said once the crude oil is included on the list of priority products, the arrangement would allow for quick payments.

“Right now when we ask for a payment to a supplier it sits there for three weeks and the supplier cuts supply because they say I am sending through the product, but you are not paying. We would be saying ‘no we have paid, but it’s in the pipe, the money has left my account,” Mr Moyo said.

Nostro accounts are normally funded through exports and other sources of inbound credit such as Diaspora, but the sharp decline in mineral prices has affected export earnings.

The decline in Zimbabwe’s mineral export revenue comes against the backdrop of a huge import bill, which has sustained negative balance between financial outflows and inflows.

The Reserve Bank of Zimbabwe has since engaged African Export and Import banks for a $200 million facility, to be termed Afreximbank Export and Import Counter Cyclical Facility.