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Oliver Kazunga Acting Business Editor
REMITTANCES coming through international money transfer agencies and formal banking channels into the country have declined by 15 percent from $2,1 billion in 2012 to $1,8 billion last year, an official has said. Presenting the 2014 monetary policy statement recently, Reserve Bank of Zimbabwe acting Governor Dr Charity Dhliwayo expressed concern over a considerable amount of Diaspora remittances that continued to be transmitted through informal channels.
“In order to tap into the Diaspora resources, the Reserve Bank is guided by the 2014 national budget in recognising the vital role played by Zimbabweans all over the world. Toward this end, work is currently underway to come up with appropriate facilities to effectively harness Diaspora savings for the development of the domestic economy,” she said.
Following the adoption of a multicurrency system in February 2009, Zimbabwe’s economic growth has not registered significant growth largely due to liquidity constraints, power challenges and obsolete machinery, among other fundamentals.
The Confederation of Zimbabwe Industries has said the local manufacturing sector needs an estimated $8 billion to stimulate productivity to competitive levels.
In this light, the public and private sectors have made several attempts to source offshore funding as well as attracting from investors.
However, the credit lines have not been forthcoming and government has noted the critical role played by Zimbabwe’s citizens living abroad in improving the liquidity situation in the country.
Dr Dhliwayo added that deterioration in the external sector position, on the back of lack of balance of payments support, further amplifies liquidity shortages obtaining in the economy.
This, she said, has a constraining effect on banks’ ability to mobilise and avail credit to the productive sectors of the economy, thereby dampening economic growth prospects.
Due to the challenges facing the economy, economic growth in 2013 was revised down to 3,4 percent compared to an initial projection of five percent.
In 2012, Zimbabwe achieved a 10,6 percent economic growth.
This year, the economy is projected to grow by 6,1 percent premised on the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), a five-year programme policy framework anchored on strong recovery of agriculture and improved performance of mining and construction sectors.
Commenting on the overview of the banking sector, Dr Dhliwayo said: “The banking sector has remained generally stable despite the various underlying macroeconomic challenges and institution specific weaknesses.
“The banking sector is currently confronted with liquidity challenges which are manifesting themselves through constrained banking sector lending capabilities, high lending rates and failure to meet customer withdrawal requirements experienced by a few banking institutions.
“Nonetheless, the few troubled banking institutions are of low systemic importance as they accounted for less than 10 percent of the banking sector’s total assets, total deposits and total loans respectively, as at December 31, 2013.”
As at December 31, 2013 total banking sector assets were $6.7 billion with commercial banks accounting for 82.69 percent of the sector’s assets.
Online Reporter