Zimbabwe Exporters Keeping $900 Million in Offshore Banks – Treasury Official

George Guvamatanga
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HARARE (Reuters) – A Zimbabwean treasury official accused exporters on Monday of keeping $900 million of their earnings in offshore banks – money that he said should be repatriated to ease dollar shortages and help stabilise the exchange rate.

The southern African nation is gripped by a severe dollar crunch which has triggered shortages of fuel and medicine. The local currency has fallen, sending prices of basic goods soaring.

George Guvamatanga, permanent secretary for ministry of finance told a parliamentary committee that $500 million out of last year’s $4.3 billion export earnings was still being kept offshore.

Another $400 million was outstanding from the January to May 2019 exports, which earned $1.4 billion, he said. Exporters were also keeping $800 million in local foreign currency accounts, he added.

“There is $1.7 billion that should be available in this economy to pay for the pharmaceuticals, to pay for the fuel and all the requirements we need as an economy,” Guvamatanga said.

“The issue is how do we enhance the interbank market so that those export proceeds can be liquidated on the interbank market,” said Guvamatanga, who appeared with Finance Minister Mthuli Ncube.

Exporters have 90 days to repatriate earnings to the country, but some of them take longer.

Some, speaking on condition of anonymity, said they were reluctant to sell their money on the official market, where traders have said the central bank is influencing the exchange rate.

They also said they were worried that once they had sold their money, there would be delays in getting dollars again on the local interbank market when they wanted to pay for imports.

Guvamatanga said the government “does not have the intention whatsoever to grab exporters’” dollars.

On Monday, the local RTGS dollar was trading at 5 to the U.S. dollar compared to 5.5 on Friday. On the black market, the unit was weaker at 7.50 versus 7 on Friday, traders said.

The central bank last week ended subsidies on fuel and directed oil companies to start to buy dollars on the official intermarket. It also told banks to ensure the exchange rate reflected market conditions

The apex bank said it had also accessed a $500 million loan from international banks that would be used to stabilise the interbank market. A first tranche of $40 million had been injected into the market last week, the central bank said. (Reporting by MacDonald Dzirutwe Editing by Andrew Heavens)