Zim eases oil import conditions as stocks run low

Harare - The Zimbabwean central bank has eased cash and import processing conditions for companies importing diesel, petrol and edible oils into the country to ensure availability of the commodities after stocks started to run low.

The cash-strapped southern African country has imposed stringent conditions on cash transactions to manage a biting liquidity crunch. It has also imposed import restrictions on most commodities but this has backfired in some cases, according to corporate sector officials.

“In recognition of the need to ensure availability of fuel in Zimbabwe, which is critical and strategic to the economy, authorised dealers are hereby advised, with immediate effect, to process fuel payment transactions for cash depositing companies by matching as an interim measure, cash deposits with cross border transfers on a ratio of 1:1,” Morris Mpofu, the Zimbabwean central bank director for exchange control, said in a recent note to banks.

The Reserve Bank of Zimbabwe is monitoring bank transactions and has come up with a priority list for offshore payments. The list has however started to cause delays in processing transactions for fuel and other critical goods imported into the country.

Mpofu added that the same principle will apply to edible oil companies in the country. Their remittances for oil importation will have to be matched on a 1:1 basis with cash deposits that they make, with banks required to declare the cash deposits by petroleum and edible oil companies in Zimbabwe.

Traders in the petroleum industry said petrol stocks have started to go down amid fears of a shortage. At the weekend some filling stations in Harare did not have petrol, but sources said the situation has now improved.

“Petrol shortages will cripple the economy and we made representations as an industry that something must be done. This will ensure that we don’t get delays in processing import payments,” said a source.

Finance Minister Patrick Chinamasa is to present a mid-term fiscal policy review on Thursday afternoon which is expected to clear the path for the introduction of a local bond currency next month. Zimbabwe’s economy is expected to decline further this year, hit by falling investments, dwindling production levels and jitters over the local bond notes.

The country is battling a cash crunch which has seen productivity nosedive, and the government says the local currency will be introduced as a way of incentivising exporters whose accounts will be credited with a 5% incentive for export receipts.