Zivanai Dhewa
…as it seeks to boost exports and promote economic growth
Barely a month after the Minister of Finance and Economic Development, Professor Mthuli Ncube revealed Government plans to increase incentives for production and export companies, for purposes of promoting economic growth, the Reserve Bank of Zimbabwe (RBZ) has released a press statement to operationalize the policy measures outlined by the Minister.
RBZ Exchange Control Director, Farai Masendu, advised that the incremental export incentive scheme was meant to complement the country’s efforts in reforming its trade system by diversifying production and exports away from the export of unprocessed products.
“Authorised Dealers are advised that an Incremental Export Incentive Scheme (IEIS) has been established to achieve a boost in productivity by firms currently engaged in exporting business as well as encourage companies that are not exporting so that they may venture into exporting business to generate sustainable growth in export revenue; to encourage listing of participation of firms on the Victoria Falls Stock Exchange (VFSE) and the Victoria Falls Offshore Finance Centre,” Masendu said.
In the mining sector, Masendu mentioned that gold will attract export incentives for registered and non-registered dealers of up to 80% retention.
“Authorised Dealers are advised that in order to encourage gold production and deliveries to Fidelity Printers and Refiners (FPR), gold producers who deliver gold quantities above their average monthly deliveries shall be entitled to a retention level of 80% on the incremental portion of the Gold delivered to FPR,” said the Director Exchange Control.
Gold producers have an advantage that will open opportunities for them to expand their gold production.
Adding on Masendu said, “Large scale gold producers who qualify for the 80% retention threshold on the incremental portion, shall also be entitled to directly export gold equivalent to the incremental portion, so as to enable them to secure funding in the form of gold loans to enhance their gold production. Fidelity Printers and Refiners shall facilitate the exportation process for the qualifying gold producers under the scheme.”
In an attempt to promote export and the ease of doing export business, the RBZ has advised authorised dealers to assist those exporters of goods, cross border transport operators, tourism and hunting operations, who wish to access export documentation from their premises.
Meanwhile, all exporters, exporters licenced under the special economic zones and exporters listed on the Victoria Falls Stock Exchange had their current FCA retention levels at 60%, but after the FCA retentions on Incremental export receipts, all exporters are at 80%, while exporters licenced under the Special Economic Zones and exporters listed on the VFSE are both at 100% retention thresholds.
RBZ has however given a stern warning to those who might want to breach the regulations as previously witnessed with the foreign currency auction floor that was now being abused by insincere and corrupt individuals and companies, fuelling the black-market. As with the foreign currency exchange floor, a monitoring framework has been put in place.
“To this end, the Exchange Control has put in place a robust monitoring framework to ensure compliance and any breach of the regulations shall result in stiff penalty, including disqualification of both the authorised dealer and the exporter from participating on the export incentive,” Masendu concluded.
