adminNgoni Dapira
THE Reserve Bank of Zimbabwe Governor, Dr John Mangudya, presented the 2014 Mid-term monetary policy review last Monday seeking solutions to challenges besetting the economy.Dr Mangudya said it was a time to put in place bold and pragmatic measures for the recovery of the economy, but, above all, Zimbabweans have to go back to the basics and work together to stimulate production for economic recovery.
“The negative perception towards the country by foreigners is mainly emanating from within Zimbabwe. Charity begins at home. We need to position ourselves in line with the African proverb that says ‘until lions start writing down their own stories, the hunters will always be the heroes’,” said the RBZ Governor.
The RBZ chief said the solutions being proffered in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation required a ‘‘team Zimbabwe’’ approach and ‘‘back to basics’’ values for the country to become a middle-income country by 2020.
“The back-to-basics values include respect of the rule of law, respect and love of each other as patriotic Zimbabweans, respect the environment, policy clarity, consistency, transparency and predictability, nurture positive business culture, nurture productive work ethics and culture to take responsibilities, visible fight against corruption, smuggling and profiteering, inculcate a culture of paying (bills, loans, duties, etc) and good citizenship.
“As monetary authorities, we are confident and optimistic that the above back-to-basics and discipline principles are achievable…
“The challenges we are facing as a nation are not insurmountable,” he said.
To map a way forward the Central Bank Governor tried to tackle head on most of the economic issues which have been a ball of contention among most local business lobby groups and economists. On pragmatic solutions, Dr Mangudya came up with a cocktail of measures that will try to turn around the economic woes in the country.
He said there was need to tighten the cash inflows and money laundering and to deal with the non-essential imports syndrome in the country.
On cash inflows and money laundering, Dr Mangudya said the limit on export of cash was with effect from last week Tuesday (August 26) reduced from $10 000 per exit to $5 000 per exit.
He said this was part of the country’s anti-money laundering measures and initiative to limit on export of cash as well as to promote the use of plastic money. Similarly the importation of goods and services above $5 000 will ordinarily be processed through normal banking channels.
On the import of non-essential goods Dr Mangudya said over and above the worsening liquidity situation, the increased appetite for non-essential imports had added to the collapse of domestic production to the detriment of both employment and tax collections.
He urged market participants to exercise restraint and use limited foreign currency resources responsibly to avoid the collapse of domestic economy and the exportation of jobs and incomes.
On the intrinsic topic on foreign investment and promotion in the country the Central Bank Governor said as part of measures to boost and sustain market liquidity RBZ was expected to play a facilitative role through the provision of an investor-friendly regulatory framework.
He said there was therefore need to create conducive conditions that allow the free and unfettered inflow of foreign investment and looked into issues such as the review of external loans threshold, the removal of restrictions on capital remittance, the promotions of offshore investment by local corporates, the increased participation by Diasporans on the Zimbabwe Stock Exchange, strengthening property rights for foreign investors, the annual renewal of the Authorised Dealership Licences, dispelling the Zimbabwean dollar return rumours, demonetisation, called for clarity on investment regulations, the economic sanctions debate and the external debt resolution concern, among several other issues.
On the review of external loans threshold, Dr Mangudya said the threshold for approval of offshore loans by authorised dealers without prior need for RBZ approval was with effect from last week Tuesday increased from the current $1 million to $7,5 million.
He said there was need to streamline the approval processes so as to enhance timeous accessing of offshore loans.
On the removal of restrictions on capital remittance with effect from last Tuesday RBZ said all disinvestment proceeds arising from both pre-May 1993 and post-May 1993 shall be fully remittable.
Dr Mangudya said this meant that investors may remit offshore any capital plus appreciation to any destination of their choice, but only after Exchange Control approval would have been granted.
On the promotions of offshore investment by local corporates he said in order to encourage foreign investment inflows and further develop the country’s bond market, exchange control restrictions on the level of foreign participation on primary issuance of bonds and participation by foreign investors in the secondary market were removed with immediate effect from last Tuesday.
He added that the purchase of bonds shall be financed by confirmed inward transfer of foreign funds through normal banking channels.
On the increased participation by Diasporans on the Zimbabwe Stock Exchange Dr Mangudya said in order to allow Zimbabweans in the Diaspora to fully participate in the economic development of their country, all non-resident Zimbabweans shall be permitted to invest in any listed counter on the Zimbabwe Stock Exchange without any limit even up to 100 percent.
Online Reporter