PRE-paid Multi-Choice subscriptions swallowed a total of $206 million over the period January to December 31, 2016.
Presenting the 2017 monetary policy statement, Reserve Bank Of Zimbabwe (RBZ) governor John Mangudya said card transactions and DStv subscriptions were the second largest user (after fuel) of foreign exchange during the second half of the year.
By Deputy Editor
A substantial amount of the US$206.7 million for example, for card and DSTV transactions paid through the nostro accounts between July-December 2016 should have been settled locally and thus preserving foreign exchange for raw materials and other foreign payments that include education.
“In fact, card transactions – which require prefunding of nostro accounts – were the second largest user (after fuel) of foreign exchange during the second half of the year. Use of hard earned foreign currency in this manner is not sustainable for the economy.” said Mangudya.
“As reported by banks that report to the Bank of International Settlement (BIS) – bank for central banks – deposits held by Zimbabweans at these offshore banks have been on-going and currently stand at above US$600 million as shown in Figure 16. Statistics of deposits held by Zimbabweans at other banks that do not report to BIS are unknown.
“Externalisation or capital flight of this nature which may be attributable to the use of mobile capital (foreign currency) as a medium of exchange and the lack of confidence within the domestic economy has a net effect of robbing the country of its hard-earned foreign exchange and deprives the country of jobs and growth in output. This calls for greater introspection among those involved in this practice in order to bring jobs and cash back to Zimbabwe.”
“This arrangement will allow Zimbabwean banks to carry out interbank settlements within Zimbabwe. To this end, VISA local settlement will go live by the end of February 2017 while MasterCard local settlement will be enabled by the end of this quarter.
This development is critical in saving the much needed foreign currency and bringing about enhanced efficiencies for local transactions. It is also envisaged that the domestication of settlement will result in corresponding reduction of costs for customers in line with prevailing domestic transactions.