The Reserve Bank of Zimbabwe (RBZ) has started operationalising the incremental export incentive scheme, which will see some exporters retain up to 100 percent of the qualifying portion of their earnings, as it seeks to drive export-led growth.
All gold producers, the central bank said, who deliver gold to Fidelity Printers and Refiners, Zimbabwe’s sole authorised gold buyer, above their monthly average, will be allowed to retain 80 percent on the incremental export scheme.
RBZ said large scale gold producers who qualify for the incentive will be allowed to export directly gold equivalent to the incremental portion so they can secure loans to support production.
Exchange control director, Mr Farai Masendu said the central bank had put in place a robust monitoring framework to ensure compliance, warning that any breach of the regulations shall result in heavy penalties.
The punishment for breaching regulations, Mr Masendu said, could entail disqualification of both the exporter and the authorised dealer from participating in the incremental export incentive scheme.
Under the incremental export incentive scheme, the retention threshold only applies to the incremental portion of the export receipts; calculated as the excess of an exporter’s earnings above an entity’s monthly base.
The central bank yesterday issued an exchange control circular, which sought to operationalise the policy measures earlier announced by the ministry of finance and economic development.
According to the central bank, the main objectives of the incentives are to promote economic growth by driving an exponential increase in exports, diversification and competitiveness.
The current export retention level stands at 60 percent, the bank said, but retention can reach 80 percent for all exporters under the incentive scheme and 100 percent for entities in special economic zones.
Further, retention on incremental receipts may also be 100 percent for exporters listed on the Victoria Falls Stock Exchange (VFEX), an affiliate of the Zimbabwe Stock Exchange main board.
The export retention, before the establishment of the export incentive scheme, was pegged at 60 percent for all exporters, including those licensed under special economic zones and VFEX. This means entities that do not qualify for the export incentive or whose receipts equal or fall under the monthly base, 60 percent will be retained in forex accounts and 40 percent sold to the RBZ.
“Authorised dealers are advised that applications for the granting of incremental export incentive shall be submitted to the exchange control exports dashboard,”
the bank said in the circular.
The bank said the objective was to boost productivity by firms currently engaged in exporting business as well as encourage companies that are not exporting to venture into exports.
The bank also said it sought to drive sustainable growth in exports, fine tune policy on export receipts retention thresholds for direct benefit to exporters and to encourage firms to list on VFEX or participation on Victoria Falls Offshore Finance Centre.
Given that many exporters have many authorised dealers the recommended amount of the incremental export shall be realised the following month after assessment and verification by exchange control.