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THE Reserve Bank of Zimbabwe has started releasing funds to different sectors of the economy under the central bank’s $210 million facility meant to fund capital projects.
RBZ governor Dr John Mangudya said $35 million has been earmarked for gold miners, both small-scale and large firms while $20 million has been disbursed to “other minerals”.
Dr Mangudya said disbursements have started with some benefits already being realised, in particular, the resuscitation of Dorowa Minerals, which produces phosphate.
The initiative is part of the Reserve Bank’s broad efforts to improve productivity, boost exports and liquidity into the economy.
The funds were mobilised from PTA Bank, the Afreximbank and Development Bank of Belarus.
In view of the integral role played by export earnings in the generation of foreign currency, there is need to put in place measures to promote production across the whole spectrum of the economy.
“We are saying over and above enticing the financiers to come back to Zimbabwe, we are also working on increasing production,” said Dr Mangudya in an interview last week.
He said the central bank was also working on enhancing productivity of firms under the RBZ.
In June, Dr Mangudya said the central bank was gradually expanding its role under the development finance programme to go beyond stabilisation and to ensure debt sustainability.
The central bank chief said this was critical to generate the much-needed export earnings to improve liquidity conditions while simultaneously substituting or displacing imports.
Since the adoption of dollarisation in 2009, export earnings accounted for 61 percent of the country’s liquidity, followed by Diaspora and international remittances at 27 percent, external loans and foreign direct investment at 13 percent.
Dr Mangudya said Zimbabwe was an open economy and depends on money from outside.
“So, because Zimbabwe is open economy, it is like a fishing net (and) any policy that is against investment; that is against production is not a good policy. So we need to open the net so that the fish can come in.
“If we have bad policies, we are closing ourselves from outside investment.”
He said the Government has been working on taming economic headwinds this year.
“There were very strong at the beginning of the year but we have put in place measures that will see us transforming next year,” he added.
The vulnerability of the country’s liquidity conditions to tobacco inflows underlines the need to diversify exports or widening the range of critical products that the country exports.
Online Reporter