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ZIMBABWE’S foreign currency earnings are poised to hit record high since 2010, spurred by mineral exports and diaspora remittances, the Reserve Bank of Zimbabwe (RBZ) said.
As of October 2021, the country had recorded a total of US$7,2 billion in foreign currency receipts, resulting in a positive current account balance of around $1,7 billion. Export earnings increased by 54,5 percent to US$4,5 billion for the period January to mid-October, compared to US$2,9 billion realised in 2020, the central bank said.
Mining exports generate about 85 percent of Zimbabwe’s foreign currency earnings.
International remittances, encompassing diaspora inflows and non-Governmental organisations, funds jumped to US$1,7 billion from US$1,1 billion,” RBZ said.
Loan proceeds rose to US$728 million from US$673 million.
Addressing delegates at a conference held in Victoria Falls recently, RBZ deputy governor Dr Kupukile Mlambo acknowledged that this year’s external sector’s performance was inspiring and could reach the highest level over a decade.
“As of now we are standing at US$7,145 billion in terms of foreign currency inflows. If you compare that to outflows that have taken place since January, which is about US$5 billion in terms of foreign currency payments outside, we are sitting on about $1, 7 billion.
“Therefore, we expect that this year we are going to get the highest foreign currency inflows since 2010, meaning we are on a growth trajectory.
“The external factor is doing very well, we are expecting a positive current account balance, driven mainly by a recovery in the global economy, performance of exports, diaspora remittances, and moderation of inflows.”
Dr Mlambo said he was confused by the volatility in the parallel market exchange rate given the amount of foreign currency in the country’s coffers.
“We are in a good situation, it puzzles me sometimes when the black market rate is running the way it is running because it is evident that it is something else, that is not driven by fundamentals.”
Dr Mlambo attributed the relatively stable economic conditions witnessed in 2021 to favourable climatic conditions, which spurred the agriculture sector performance and worthy policy framework which was crafted during the year.
He pointed out that the two inputs (favorable climatic conditions and policy framework) had been complementary in attaining better economic conditions compared to the two previous years.
“You can have good rains but if you have bad policies it does not help, so the major contributor that sustained economic progress in the country in 2021 was the policy environment that we are creating and the policies that we have introduced.”
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