The Reserve Bank of Zimbabwe (RBZ) is set to resolve the increasing foreign currency allocation challenge that has hit local retailers and suppliers who for a long time have been failing to secure stocks and enough supplies for the local market as they are not top of the central bank's priority list, which bankers have to adhere to.
The RBZ is said to have resolved to step in to help the retailers after a meeting between suppliers and members of the retailers representative body, the Confederation of Zimbabwe Retailers Association and itself on Tuesday raised the red flag on the ongoing challenges faced by retailers to access foreign currency.
The retailers fear that if they are not allocated foreign currency, the country is likely to experience food shortages. Contacted for comment, Confederation of Zimbabwe Retailers director for marketing and stakeholder relations Alouis Burutsa confirmed the meeting with the RBZ and highlighted that retailers have for a long-time been shunned by banks on the foreign currency allocation list.
"Suppliers and retailers met the RBZ this week and we expressed our grievances citing that banks were no longer following the mandated foreign currency priority list due to nepotism and sometimes corruption.
"As retailers and suppliers we play a critical role in the economic development of this country because if you look at manufacturers we are a conduit for manufacturers to reach their vast consumers. "Therefore we made a plea to the RBZ for assistance as a sector," said Burutsa.
"The Governor told us to consolidate all outstanding foreign payments belonging to suppliers and retailers and then forward them to the RBZ. The Governor assured that the Central Bank will facilitate the clearance of all outstanding foreign payments for retailers and suppliers," he said. RBZ Governor Dr John Mangudya was not immediately available for comment but has on record been advocating for the clearing of outstanding foreign payments.
At the meeting he is said to have agreed to assist in clearing all Telegraphic Transfers (TT's) belonging to retailers in the country. Of late, importers especially retailers have expressed dissatisfaction over delays in the processing of Telegraphic Transfers which they thought have been seriously affecting their ability to seamlessly buy and supply the local market with critical goods and services.
A telegraphic transfer is an electronic method of transferring funds that is used primarily for overseas wire transactions. While some retailers say it is taking up to two weeks for TTs to reflect in suppliers' accounts, the sector representatives highlighted that some transactions originated as far back as April are still outstanding. As a result, imports of both finished products and raw materials have been adversely affected.
Industry, which claims to have earlier raised the red flag with stakeholders, is now imploring Government to ensure that the bottleneck is cleared before the situation further deteriorates. In his Monetary Policy Statement, Dr Mangudya announced that the Central Bank has secured a nostro stabilisation facility of $600 million from Afreximbank to manage the country's foreign exchange receipts.