HARARE – Zimbabweans are spending a fortune in foreign currency by importing non-essential consumer goods, while importation of critical capital and intermediate goods remains depressed.
This, President Emmerson Mnangagwa has said, is militating against quick economic recovery.
While forex receipts have gradually increased over the last 12 months, spending on consumer goods continues to compete with outlay on critical economic enablers.
In his weekly column in the State media, President Mnangagwa says foreign currency inflows grew by over 17 percent to US$5,6 billion between January and November compared to the same period last year.
He said the upsurge in forex receipts was a sign of embryonic export activity in the economy.
However, the Head of State and Government notes, these gains are being undermined by unrestrained spending on consumer goods.
“The Reserve Bank of Zimbabwe report on this year’s foreign currency supply and demand up to the week of 16th November, 2018, gives key indicative facts and figures. I will isolate just a few of these in order to raise a structural issue concerning our economy.
“The global foreign currency receipts from January to mid-November stood at US$5,661 billion, compared to US$4,822 billion received during the same period last year.
“This represents a 17,4 percent increase in receipts, much of it pointing to the growing export activity in the economy.”
President Mnangagwa says the figures render false arguments by some prophets of doom that Zimbabwe is in a downward spiral.
“Also, during the same period under review, global foreign payments decreased by five percent to US$4,054 billion from the 2017 figure of US$4,264 billion,” he continues.
“We thus had a positive foreign currency net position of US$1,937 billion, compared to US$582,9 million for the same period in 2017. All these are positive trends.”
The President says his administration will consolidate gains realised from increased forex receipts through resolute fiscal consolidation as announced in the 2019 Budget, to trigger quick economic recovery.
“But the report also gives facts and figures which made a worrisome impression on my mind. Our cash transactions on imported consumption goods for the same period stood at US$839,4 million. Although lower than the 2017 figure of US$1,055 billion, still this figure is too high.
“It gets worrisome when read against the figure of US$883,5 million which we spent on capital goods, and another of US$705,5 million which we spent on intermediate goods imports.
“Our spending on imported consumer goods should never come anywhere near our spending on capital and intermediate goods.
“I raise this worry because our economy grows on greater investments on capital goods and intermediate goods. It cannot grow on consumer imports.”
Finance and Economic Development Minister Professor Mthuli Ncube recently invoked the Customs and Exercise Act and imposed duty in foreign currency on an array of goods that include vehicles and meat to stem local appetite for imported consumer goods.
Goods listed for duty in forex include fresh cheese, grated or powdered cheese of all kinds, fresh grapes, ground nuts, margarine, selected meat products, poultry products, swine meat, preserved fish and salt water.
The other products on the list include eggs, sugar confectionery, chocolates, cereals, sweet biscuits, bread, tomatoes, potatoes, mushrooms, beans, grape juices, selected cigarettes, trunk suitcases, handbags and toilet linen.
According to a Statutory Instrument published in the Government Gazette in terms of Section 115 (3) of the Customs and Exercise Act (Chapter 23:02) the new regulations came into effect on November 23.