We Have Not Borrowed From RBZ In 3 Years – Govt
Secretary for Finance and Economic Development George Guvamatanga has said, the Zimbabwe government has not borrowed from the Reserve Bank of Zimbabwe (RBZ) in three years.Dr.Guvamatanga cited that the second Republic has lived within its means and for the first time not knocked on RBZ Governor Dr John Mangudya’s office requesting for an overdraft.
Speaking from Dubai, United Arab Emirates, after touring Zimbabwe’s pavilion at Expo 2020 Dubai, Mr Guvamatanga said the fact that the economy was in a better condition than it has been in a long time would be a gross understatement .
“On the fiscal side, I think we have been living within our means for the past three years. We as Government have not in any way gone to borrow from the Reserve Bank, which had actually been our problem in the past. We have not borrowed even one single dollar from the Reserve Bank, he said.
Mr Guvamatanga said Zimbabwe currently was in a solid external position, healthy fiscal situation and strong monetary position.
“All those signs, under normal circumstances, should actually be leading to a strong exchange rate, and not some of the instability that we have been seeing in the market, but we know what is pushing the instability and we are attending to those issues,” he said.
Mr Guvamatanga said Zimbabwe had come a long way in terms of exchange rate management, culminating in the adoption of the weekly auction system, which had said was an ‘open market’ price discovery system.
“To say that we are in a better position is actually an understatement. I think we are in a very great position. I think if you look at our trade numbers, which were released by the monetary authorities, which provided the numbers as at August 7, actually showed that our exports have grown by over 36 percent year on year, largely driven by strong global commodity prices as well as diaspora inflows,” Mr Guvamatanga said.
The growth in exports, Mr Guvamatanga said, had resulted in Zimbabwe recording a positive external sector position. While imports have similarly grown during this period, their increase has been slower than the inflows of US$5,4 billion and exports of around US$3,8 billion.
The national Treasurer said this scenario had culminated in a surplus of more than US$1,7 billion on the current account, which was available within banks as ‘hard currency’. We are holding over US$1,7 billion, so it is the strongest external position we have had over many years.
“So, we have also been fortunate to receive special drawing rights or the SDRs from the International Monetary Fund. So, if you . . . look, the US$1,7 billion that is sitting in foreign currency accounts, you take the US$1 billion we have received as well from the IMF and you add to the Forex cash in circulation in Zimbabwe, we easily have US$3,5 billion, US$4 billion of cash.
“And if we were to convert that into import cover , that is more than 10 months of import cover; so Zimbabwe’s external position is very strong right now.
“We are also seeing quite a big range of Zimbabwean products now available in our shops and on the shelves of most retail outlets,” Mr Guvamatanga said.