8 March 2018

Zimbabwe: RBZ Sets Tobacco Cash Ceiling

The Reserve Bank of Zimbabwe set a $300 daily cash payment ceiling for tobacco growers this season with balances paid electronically in a move expected to improve settlement efficiency. Last year, farmers were allowed to withdraw as much as $1 000 cash per day, but banks were unable to meet the demand.

This comes amid concern farmers spent days trying to withdraw cash for their tobacco deliveries, giving rise to unscrupulous transactions and side marketing. The delays also ate into the tobacco grower's margins.

"In order to ensure a smooth payment that is consistent with international best practice on daily cash withdrawal limits, growers shall be paid a maximum of $300 per day through banks stationed at the auction floors," Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya said in a statement yesterday.

"This shall be disbursed at all banks stationed at the auction floors upon presentation of the sales statements by the tobacco growers. The balance shall be ransferred into the grower's bank account or mobile money wallet," Dr Mangudya added.

The move is meant to buttress support to the tobacco industry, one of the largest foreign currency earners, racking in $1,3 billion in the previous season according to the Tobacco Industry and Marketing Board (TIMB).

Already, Dr Mangudya said, the central bank has increased the tobacco finance facility to $70 million, up from $28 million in the 2017 planting season as part of efforts to ensure farmers access inputs at affordable prices. The export incentive for the tobacco growers was increased to 12.5 percent, from 5 percent and this amount will be paid through the respective grower's bank accounts or mobile money services on a monthly basis.

Government in May 2016 introduced bond notes which were paid as an export incentive to industry to boost exports and at the same time improving access to cash.

By the end of 2017, the RBZ had paid about $30 million as export incentives to tobacco growers. Zimbabwe's foreign currency situation, currently characterized by a huge backlog of foreign payments, is expected to improve once auction floors open.

Foreign currency is needed in the purchase of fuel, raw materials, and other commodities. In the 2017/18 season number of registered growers is 118 338 farmers, an increase of 44 percent from the 82 438 growers who had registered during the same period in 2017. The volume of tobacco deliveries this current season is expected to breach 200 million kgs.

In 2017 tobacco production stood at 186 million kgs.

Zimbabwe

Chamisa to Mnangagwa - I Don't Need Your Official Opposition Leader Job

MDC leader Nelson Chamisa has again scoffed at Zanu PF plans to create an official leader of the opposition position,… Read more »

See What Everyone is Watching

Copyright © 2018 The Herald. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.