Zimbabwe’s central bank said it plans to sell bonds for citizens outside the country to invest in gold and tobacco output as it also introduces banking rules to encourage money flows and exports.
The Reserve Bank of Zimbabwe will provide the market with more information on the diaspora bonds “in due course,” the Harare-based regulator said in a Feb. 13 circular to banks obtained by Bloomberg. The southern African nation was once the world’s second-biggest exporter of top-grade tobacco.
Lenders must give exporters access to all the foreign currency they get from selling goods within 14 days of the funds being deposited, the bank said. Small, non-corporate exporters shipping more than $2,000 of goods no longer need to fill in certain forms, making business easier, the bank said, without saying what the prior, lower threshold was.
The new policies and plans come three months after Robert Mugabe was toppled as president following 37 years in power and replaced by his former deputy, Emmerson Mnangagwa, who has been on a drive to revive the economy and attract investment. The new administration will allow white farmers to apply for 99-year leases on land compared with five previously and has also pledged to compensate them for improvements that they made to land that was seized.
The nation abandoned the Zimbabwe dollar in February 2009 after an economic collapse saw inflation surge to about 500 billion percent, according to the International Monetary Fund. This resulted in the central bank printing banknotes with a face value of 100 trillion Zimbabwe dollars. A crippling shortage of cash led to the introduction of so-called bond notes in 2016. While the government says these are equal to the dollar, they are not accepted by foreign suppliers.
The bank is introducing other initiatives to promote business, having opened a dedicated desk to facilitate investment proposals by Zimbabweans in the diaspora to speed up consideration of the plans. It is also offering a 7 percent tax-free savings bond.
To ensure that property sales are settled locally, banks must ensure that all foreign-currency proceeds from the sales are available to the beneficiary for use. The Reserve Bank’s exchange-control department will consider exceptions to the policy on an individual basis.
Lenders have to provide the Reserve Bank plans on how they will work to boost the nation’s exports.
All authorized dealers must furnish the Reserve Bank of Zimbabwe’s exchange-control unit with their strategies by March 2, outlining “measurable objectives” such as growth in the number of registered exporting entities and export value per bank,” it said in the circular.