Wednesday, December 19, 2018
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Zimbabwe lifts import ban

Import ban lifted in ZimbabweZimbabwe lifted a ban on the import of basic goods and foodstuffs after shelves were emptied by consumers panicking over a currency crisis.

After winning a disputed election in July, President Emmerson Mnangagwa pledged to end long-running currency shortages and revive a struggling economy but his government’s early interventions caused public alarm.

The introduction of a new tax on electronic transactions in an economy desperately short of hard cash caused fuel shortages and prompted shoppers to stockpile goods, leaving shops empty of basics like cooking oil and sugar.

Zimbabwe introduced a ban on the imports of many basic goods in 2016 as it sought to help its manufacturing recover after more than a decade of contraction.

“Cabinet noted with concern basic commodities continued to be in short supply,” Information Minister Monica Mutsvangwa said in a statement.

“As a way forward, Cabinet resolved to allow both companies and individuals with offshore funds and free funds to import specified basic commodities currently in short supply, pending the return to normalcy.”

Zimbabwe adopted the use of foreign currencies, mostly the US dollar, in 2009 after the Zimbabwe dollar was destroyed by hyper-inflation.

A huge trade deficit led to a shortage of US dollar bills in the economy, which the authorities responded to by issuing a “bond note” quasi-currency pegged at parity to the greenback in November 2016.

The bond notes trade at a significant discount to the US dollar on the black market and failed to address the shortage of banknotes.

On October 1, the central bank directed banks to separate foreign currency accounts from bond notes and associated electronic deposits.

This tacit admission the bond notes were not at par with the US dollar accelerated its collapse on the black market.

 

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