In the second half of 2016, the RBZ and the Business Council of Zimbabwe (represented by the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce, and the Bankers Association of Zimbabwe) instituted a Foreign Exchange Priority List which is meant to:
…promote efficient utilisation of foreign exchange and to re-orient import demand towards productive uses…
….guide banks in the distribution of foreign currency towards competing demands.
Basically, the priority list is a guideline in the execution of all foreign payments for all authorised forex dealers in Zimbabwe.
Over the last few months, Techzim has seen the priority list take full effect in the local tech landscape as companies like ZOL reportedly failed to make foreign payments for equipment thus failing to complete installations and EcoCash failing to remit payments of DStv subs through its mobile money platform to South Africa in USD now opting for its clients to pay using its RAND wallet and even ZESA cast a thinly veiled warning of power shortages due to lack of foreign currency to pay its regional suppliers.
Techzim has also seen reports of people failing to make online payments for goods and services through their VISA/Mastercard with many banks now suspending their use locally and setting new limits for international transactions and online payments as they too are unable to honour payments due to the priority list.
But up to now, very little is known about this list and what exactly is on it so Techzim though it would be good to share the forex priority list with its readers.
The priority list is broken down into four sections, Priority One (High), Priority Two (Medium), Priority Three (Low), and Priority Four ( No Priority). Techzim hopes that knowing this can help guide any individuals or business in their next payment decision with full knowledge of whether the RBZ prioritises their activities.
PRIORITY ONE (HIGH)
- Net Exporters who import raw materials or machinery to aide them to produce and generate more exports;
- Non-exporting importers of raw materials and machinery for local production (value addition) that directly substitute import of essential finished goods;
- Imports of critical and strategic goods such as basic food stuff and fuel, health and agrochemicals granted these goods are not available locally;
- Repayments of offshore lines of credit procured to fund productive activities;
- Payments for services not available in Zimbabwe;
- Foreign investment (Capital disinvestments, profits and dividends).
PRIORITY TWO (MEDIUM)
- Bank borrowing clients in the productive sector who engage in critical and strategic imports
PRIORITY THREE (LOW)
- University and college fees.
- Cash depositing clients in the retail and wholesale service industry. The customers generate cash which can either be recycled for local use or repatriated to replenish Nostro accounts.
- Other borrowing clients who have engaged in the importation of non-strategic goods.
PRIORITY FOUR (NO PRIORITY)
- Capital remittances from disposal of local property
- Capital remittances for cross-border investments
- Funding of offshore credit cards
- Importation of trinkets, low local content consumer goods and/ or goods readily available in Zimbabwe including non-commercial vehicles, maheu, bottled water, tomatoes, vegetables.
- Payments for services available in Zimbabwe