Zimbabwe exporters face new currency problem

Martin Rushmere A stand-off has developed between Zimbabwe's exporters and the National Railways of Zimbabwe over payment of rail freight in hard currency. The railways say that payment for all goods going out of the country must be made in hard currency, preferably the US dollar, as from August 1. In theory this will apply even to the thousands of people emigrating. The exporters have given the business equivalent of an obscene gesture and say they will continue to pay in local currency. 'It boils down to whether the Reserve Bank has given its permission," says Rhett Hill of the Shipping and Forwarding Agents Association. 'So far, no evidence has been forthcoming from the railways." The biggest ferrochrome exporter in the country told FTW in Harare: "We are dead against the idea. The railways maintain they have the Reserve Bank's authority, but when we asked to see the proof, they said they were not allowed to show it to anyone!!!" The tobacco industry, Zimbabwe's biggest export revenue earner, is also refusing to comply. "We have told them it is counter-productive and we are paying in local currency," says a senior official of the Tobacco Trade Association. Many rail customers will be forced to get the money through the parallel exchange market, where the rate of Z$220 to US$1 is almost five times the official rate. 'That sort of cost makes road transport much cheaper," said one exporter. An added worry is that what has become known as the 'forex payment virus" will spread to other organisations. 'The airlines and the telephone corporation might think this is a good idea and follow suit," says Hill.