PRICES & CURRENCY CRISIS: Mthuli Ncube scraps duty on basic commodities imports; transfers Govt loans from RBZ to Treasury

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By Alois Vinga

FINANCE Minister, Mthuli Ncube Thursday scrapped duty on all basic commodities imports and ordered the transfer of government loans from the Reserve Bank of Zimbabwe to Treasury as part of a cocktail of measures aimed at stabilising the local currency.

The measures, announced Thursday, come on the back of rising concerns over the continued weakening of the ZWL which has seen parallel market rates waning to over US$1: ZWL 2,500 in recent weeks, triggering alarm in the markets.

Retailers and service providers have swiftly responded by hiking the prices of basic commodities often by margins much higher than the parallel market rates as they move to hedge against suspected impending uncertainties.

Resultantly, prices of basic commodities have gone beyond the reach of many, leaving a section of society without access to the US$ in the dire straits.

But announcing the latest raft of measures implemented in the country’s determined war against inflation, Ncube affected a duty waiver on the basics.


“In order to enhance the supply of basic goods to the public, all basic goods will no longer be subject to import licences, and will also come into the country free of import duties and taxes,” he said.

The treasury boss allowed the Reserve Bank of Zimbabwe (RBZ) to allow the domestic interest rates framework on ZWL savings to be above the perceived rate of expected devaluation for holding ZWL balances in a bid to promote the hold of the ZWL.

He underscored that domestic interest rates remain a variable of focus and are the main tools available for monetary authorities to discourage speculative borrowing and to reduce the velocity of the ZWL and thus promote stability.

All government agencies and departments were ordered to collect their fees and levies in the local ZWL currency.

“In order to promote the banking of domestic sales foreign currency in the banking system, the Reserve Bank of Zimbabwe will with effect from May 15 2023 exempt all proceeds from domestic sales in foreign currency from the 15% surrender requirement.

“All external loans to the Government of Zimbabwe will now be transferred from the Reserve Bank of Zimbabwe to the Treasury,” he said.

He added that the Foreign Exchange Auction System will be further fine-tuned and will now auction a pre-announced envelope, on a pure Dutch auction basis.