Export incentive spur production
By Tichaona Kurewa
HARARE-THE five percent export incentive the Reserve Bank of Zimbabwe (RBZ) introduced in 2016 is spurring production in most sectors of the economy, the central bank’s chief executive, Dr John Mangudya says.
The export incentive is guaranteed to the tune of US$200 million by the African Export-Import Bank with the primary objective to grow more exports and generate foreign currency for the Southern African country.
The incentive is in the form of bond notes, trading at par with the United States dollar.
Mangudya says a number of policy measures are being implemented to transform Zimbabwe’s growth model in line with economic blueprint, Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset).
“Moreover, the introduction of an export incentive scheme financed through bond notes has seen a positive response, particularly from tobacco and gold producers,” he says.
“According to the Tobacco Industry and Marketing Board (TIMB), tobacco farmers have increased the hectarage under this agricultural season by around 10 percent from 97,000 hectares planted in 2015/2016 to 107,000 hectares with an expected output of 200-215 million kilograms of green leaf tobacco.”
The gold sector, Mangudya says, has also responded positively to the incentive scheme and the monitoring process by the Gold Mobilisation Committee resulting in an increase in gold delivered to Fidelity Printers and Refiners (FPR) by 17 percent from 18.3 tonnes in 2015 to 21.4 tonnes in 2016.
“Gold delivery to FPR, which excludes the gold from Platinum Group Metals (PGMs), is expected to be 25 tonnes in 2017,” he said.
Apart from the export incentive, Zimbabwe also introduced other measures to boost production.
These include ease and cost of doing business reforms being championed by the Office of the President and Cabinet, the Public Finance Management Framework by the Ministry of Finance and Economic Development, the Special Economic Zones by the Ministry of Macro-Planning and Investment Promotion, localisation of domestic industrial production through Statutory Instrument 64 of 2016 promulgated by the Ministry of Industry and Commerce and the foreign exchange management measures put in place by the central bank.