Export incentives for large miners under US$200 million facility at 2,5% not 5%: RBZ

The greenback anchors the country’s multiple currency regime.

The greenback anchors the country’s multiple currency regime.

THE Reserve Bank of Zimbabwe has said that large mining exporters shall be entitled to a 2.5% export incentive scheme under the $200 million Afreximbank foreign exchange facility provided they do not have overdue export proceeds while other mining exporters or foreign currency earner will be entitled to the 5% export incentive scheme.

According to the RBZ Exchange Control Unit operational modalities for authorized foreign currency dealers the measures are aimed at dealing with cash shortages whilst simultaneously stabilising and stimulating the economy.

The modalities are outlined in the Central Bank’s ECOGAD8/2016 statement.

In order to restore and promote the widespread usage of currencies in the multi-currency basket, 40% of all new USD foreign exchange receipts from export of goods and services, including proceeds from the sale of tobacco and gold, shall be converted by the Central Bank at the prevailing market exchange rate to Rands and 10% converted in the same manner to Euros.

The remaining 50% would shall be credited into the exporters or foreign currency earner’s FCA denominated in United States Dollars.

The Exchange Control Division said that resource based large mining exporters will be entitled to 2.5% export incentive scheme provided that they do not have overdue export proceeds whilst other mining exporters or foreign currency earners not on the list but in the resource based sector, would be entitled to the 5% export incentive scheme as any other exporter, provided that they do not have overdue export proceeds.

Some of the mining companies on the large exporters list include MIMOSA, Zimbabwe Platinum Mines (Pvt) Ltd, Fidelity Printers And Refiners, Unki Mine and Bindura Nickel Corporation.

“This framework shall not apply to Diaspora remittances, and non-governmental organisations, where such receipts shall continue to be credited into their Foreign Currency Accounts where Diaspora payouts and utilisation shall continue to be in the recipient’s currency of choice as free funds in line with existing policy,” read the statement.

“In addition, Authorized Dealers will be required to declare, on a daily basis, to Exchange Control by 1000hrs every day, foreign currency earnings of the previous day on the EC-Form Foreign Currency Earnings.”

In order to promote proficient utilisation of foreign exchange and to re-orient import demand towards productive uses, the Bank, together with the Business Council, represented by the Confederation of Zimbabwe Industries (CZI), Zimbabwe National Chamber of Commerce (ZNCC), and the Bankers Association of Zimbabwe (BAZ) came up with foreign exchange priority list to guide banks in the distribution of foreign currency towards competing demands.

To facilitate declaration of import payments through the banking system, all imports above the USD5,000 threshold shall be processed through normal banking channels to promote use of the international payments system. This requirement is expected to ease pressure on the demand for cash for payments of imports

The RBZ also said in order to ensure the transparent use and avoid abuse of international credit cards, a limit of USD10,000 or the equivalence in any of the multi-currencies shall be allowed per external visit. “Authorised Dealers shall ensure that clients with such international credit cards comply with these requirements” FinX

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