The Reserve Bank of
Zimbabwe’s new directive that
platinum and chrome miners
give up 80% of their foreign
currency earnings to the bank
– effectively cutting off their
cash flow for imported goods
and services – is likely to be
challenged in court.
This is the opinion of
Zimbabwean economist John
Robertson who told FTW
that the directive had not only
affected the platinum miners
but their private banks as
well. “Banking
companies have
an obligation
to protect the
interests of
their clients
– the miners –
but have also
been instructed
by the Reserve
Bank to send on
their customers’
foreign
currency
earnings. This
puts the banks
in a very difficult position,” he
said.
The Reserve Bank move
was prompted by its battle to
obtain foreign currency in an
increasingly tough liquidity
crunch that has started to
impact on business operations.
“More than half of Zimbabwe’s
foreign currency earnings come
from the platinum miners and
the government sees them as
the quickest, easiest way to get
their hands on scarce currency,”
explained Robertson.
According to a Reserve
Bank statement, the bank will
in turn credit the companies
electronically but Robertson
said those electronic credits
could not be used outside of
Zimbabwe. “Effectively, the
mining companies cannot
import equipment, materials
or even technical expertise.
Which, given the highly
technical nature of mining,
means ongoing production is
dramatically hampered,” he
pointed out.
So too will logistics
companies serving the mines be
affected as they will not be paid
or paid very late. One transport
brokering company owner who
spoke to FTW anonymously
said he had
stopped
taking on jobs
for mining
companies
when the
Zimbabwean
government
issued a
directive two
years ago
that 50% of
miners’ foreign
currency had
to go to the
Reserve Bank.
“It was always such a struggle
to get payment from them,” he
said.
Robertson explained that
when companies operated
with electronic funds they had
to obtain permission to pay
suppliers outside of the country.
“Government has a priority
list and funds will be allocated
according to that priority list.
The list is prioritised according
to what government deems to
be in the best interests of the
country,” he said.
Those with low priority could
wait for months to obtain funds
while many never get their
funds released.
INSERT & CAPTION
More than half of
Zimbabwe’s foreign
currency earnings
come from platinum
miners.
– John Robertson
