28 May 2017
   
MDC-T, SA's DA in regional opposition pact
Brother et al revive late Muzorewa's party
Zhuwao: Bona Mugabe in youths bank board
Dabengwa to flood victims: Dump Zanu PF
Govt to deposit $ into flood victims accounts
Musician batters, strips and films wife
Man dies in fight over pig, killer fined $100
Kagame rivals's poll messages veted
MORE NEWS
Barclays Zim staff try block bank sale
Econet, Delta drive ZSE to new heights
MORE BUSINESS
Music fans run riot, stone YAFM studios
New curriculum stand @Bulawayo book fair
MORE SHOWBIZ
Warriors forced to sign indemnity forms
Masakadza finds favour ahead of tour
MORE SPORTS
Robert Mugabe – A history of violence
How Zuma blew chance against rivals
MORE OPINION
 
Africa Day: Whither to dearest Africa
SA Rand disastrous for Zimbabwe
MORE COLUMNISTS
 
 

RBZ: Zimbabweans spend more on DSTV than on raw materials for manufacturing

15/02/2017 00:00:00
by Bloomberg I Staff Reporter
 
 
RELATED STORIES
Diaspora cash down 17pct, most from SA

THE central bank has said it is “illogical” and undermining efforts to stem a cash shortage that the country is spending more on DSTV (satellite television) subscriptions than on imports of the raw materials needed to produce cooking oil.

Zimbabwe is facing its worst economic crisis since 2008 as a liquidity squeeze has left companies unable to pay foreign suppliers and workers in cash. The economy probably shrank 0.3 percent last year and is set to contract 2.5 percent his year, according to the International Monetary Fund.

Financial institutions used $207 million for the payment of satellite television subscriptions during the last six months of 2016 through accounts held in offshore currencies, the largest allotment of foreign exchange after fuel in the period, the Reserve Bank of Zimbabwe said in its monetary policy statement on Wednesday.

“Spending more foreign exchange on DSTV subscriptions than on raw materials to produce cooking oil, for example, is not only counterproductive but also illogical.

“Use of hard-earned foreign currency in this manner is not sustainable,” the central bank said. Banks should “exercise discipline and rationality in the distribution of foreign exchange among the competing needs of the economy.”



Advertisement

“Similarly, Zimbabweans’ appetite to externalise foreign exchange to foreign banks puts unnecessary pressure on the country’s balance of payments," the bank added.

“As reported by banks that report to the Bank of International Settlement (BIS) - bank for central banks - deposits held by Zimbabweans at these offshore banks have been on-going and currently stand at above US$600 million.

“Externalisation or capital flight of this nature which may be attributable to the use of mobile capital (foreign currency) as a medium of exchange and the lack of confidence within the domestic economy has a net effect of robbing the country of its hard-earned foreign exchange and deprives the country of jobs and growth in output.

“This calls for greater introspection among those involved in this practice in order to bring jobs and cash back to Zimbabwe.”

To counter this, banks will have to start settling domestic transactions made through credit card payments locally before the end of March, the central bank said. It didn’t say how credit card companies would settle foreign payments locally, while calls to the bank weren’t immediately answered.

Total foreign currency receipts fell 14 percent to $5.4 billion in 2016, while export proceeds shrank 13 percent to $2.96 billion, the bank said. Remittances from Zimbabweans living abroad slumped 18 percent to $1.57 billion.


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark
 
 
 
comments powered by Disqus
 
RSS NewsTicker