Zimbabwe Finance Minister refuses to budge on relaxing cash withdrawal limits


*HON. SEN. DENGA: Thank you Mr. President, my question is directed to the Minister of Agriculture.  My question is in regards to payment of farmers.  We have contract farmers who were contracted to farm tobacco under Command Agriculture.  Their bills are now coming in foreign currency. What is Government’s plan for tobacco and maize farmers under Command Agriculture – are they going to be paid in foreign currency or local currency?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you very much Hon. Senator for that question.  Certainly the tobacco farmers are going to receive half of their money in hard US dollars and the other half will be converted to domestic currency at the going auction rate. This 50:50 split is an improvement from the previous 2 years where they were only getting 40% in foreign currency and the other bit was in domestic currency.  So, this is an improvement and I think that we are in a better position this year, compared to the last two years.

The good thing is that the currency is also stable, prices are coming down and everything looks better.  I think that going forward, it is important to also increase domestic funding of tobacco and domestic funding of all exportable agricultural commodities.  Why, because this way, we can then maximise on the foreign currency that we earned last year to overall revenues for tobacco, for example we have the order half a billion US dollars.  From the figures from our Central Bank, we as a country in terms of foreign currency net earnings, we only earned about 10% of that, which is just below $50 million.

Clearly increasing domestic financing and domestic currency is the way to go over time, but at the same time still accommodating foreign funding.  I thank you.

*HON. SEN. ENG. MUDZURI: Thank you Mr. President, Hon. Minister you said you are going to give farmers 50% of the money in foreign currency and the other in local currency.  Did you take into consideration small scale farmers in rural areas like Malipati and Chiendambuya?  Yes, they are going to get 50% in US dollars for them to be able to access their money in ecocash or banks because they will not get the local money in cash.  Considering that banks only offer 2000RTGS per week, the elderly in the rural areas want their cash.  How are these people in rural areas going to access their money if they are given 50 000 and they are only allowed to withdraw 2 000 per week?  What is Government’s plan to alleviate this problem, especially those in the rural areas who will have also to travel long distances to withdraw money?

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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