02-08-18 by Spotlight Zimbabwe

Don’t expect overnight change in economy: Zimbabwe’s central bank

 

HARARE— Zimbabwe’s central bank governor on Wednesday presented his first post-Mugabe monetary policy statement, warning the nation not to expect an overnight change in economic fortunes.

Zimbabwe’s former president Robert Mugabe resigned in November last year after 37 years in power, paving way for a new government led by President Emmerson Mnangagwa.

Governor John Mangudya said more work was required to grow the economy through opening up for business, increasing export production and intensifying foreign investment attraction.

He said the country would continue to use the multiple currency regime introduced in 2009 until economic fundamentals are right for reintroduction of a local currency.

Meanwhile, the central bank was negotiating a 1.5-billion-U.S.-dollar facility with African Export-Import Bank (Afreximbank) to guarantee investors’ funds as well as improve liquidity.

The bank was also arranging a 400-million-dollar facility to finance critical imports and allow investors to repatriate funds, the governor said.

He said in 2017, the forex-starved country drew down 1.1 billion dollars from various nostro stabilization facilities, which helped to stabilize the foreign exchange market and sustain importation of critical imports.

A total of 290 million bond notes was also in circulation as of December 2017, the governor said.

“This is the money that is in the market, together with the 1.1 billion dollars that we borrowed. It may not be as liquid as we want but it is liquid enough to sustain the economy going forward,” Mangudya said.

The governor said he will give an update on the amount of money that has been brought back into the country by companies and individuals that externalized it when the amnesty expires at the end of the February.

“We are encouraged by the overwhelming response by people who are taking measures to comply. The response has been positive from both individuals and corporates,” he said.

Mnangagwa’s government in November issued a three-month amnesty to people and companies that illegally stashed funds abroad, demanding repatriation on a “no questions asked” basis.

Mangudya said the central bank will intensify re-engagement with the international community to resolve the external payment arrears to the remaining International Financial Institutions (IFIs) as well as bilateral creditors.

“In this regard, the government will follow the previously agreed process for clearing external payment arrears to international financial institutions, which was endorsed by the IFIs and Bilateral Creditors at a meeting held on the side lines of the Annual Meetings of the IMF and World Bank in Lima, Peru, in October 2015,” the governor said.

Zimbabwe owes the World Bank 1.15 billion dollars, 601 million dollars to the African Development Bank and over 3 billion dollars the Paris Club, among other creditors.

 

Xinhua 

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  • Governor John Mangudya said more work was required to grow the economy through opening up for business, increasing export production and intensifying foreign investment attraction.
    No foreign investors are coming to Zimbabwe until they are convinced the country has finally shed off its pariah and lawless state status. Although the coup saved a very useful purpose of removing the dictator, Robert Mugabe, his removal by a military coup did not exactly help end the nation’s lawless thug image.
    President Mnangagwa has promised free, fair and credible elections and already everyone can see he has no intention of holding such elections. It is ironic that he and his coup cabinet are ploughing on heedlessly convinced they are fooling everyone. They are forgetting the foreign investors they are wooing are the savviest individuals there are in this world, they will not be so easily fooled.
    If Zimbabwe fails to hold free, fair and verifiable elections then the nation can kiss goodbye to economic recovery; investors do not invest in nations whose state president are life-president or else step down at gun-point!