A total of US$6,7 billion was channelled towards foreign payments between January and December 2021 with the bulk of the funding going towards procurement of raw material and other essential products.
Of this amount, about US$2 billion was allotted to 7 325 organisations through the Reserve Bank of Zimbabwe’s foreign currency auction system.
Since its commencement on June 2020, the official forex trading platform has been credited for assisting the growth of the productive sector through increased formal access to scarce forex resources, averaging US$40 million per week.
This has seen industry capacity utilisation jumping to about 60 percent in 2021 compared to 47 percent in 2020 and 36 percent in 2019, according to the Confederation of Zimbabwe Industries (CZI).
Although the parallel market still persists, the system has also been lauded by business leaders for restoring sanity in forex trading, which is helping the country towards price discovery and stability.
Industry experts have, however, called for the fine-tuning of the forex platform to reduce the wider gap between formal and parallel market exchange rates.
At the moment the formal exchange rate is hovering at around US$1:$108 while the parallel market rate is inching close to US$1: $200.
Financial economists blame the continued price distortions to the wider gap between formal and parallel market rates, which creates arbitrage due to speculation and perceived loss of value for the local currency.
The list shows 2 037 beneficiaries of US$1,6 billion allotted under the main foreign exchange auction and 5 288 beneficiaries of US$3,3 billion allotted under the small to medium enterprises (SMEs) foreign exchange auction and a schedule showing the total foreign exchange payments by source amounting to US$6,7 billion.
The breakdown covers foreign currency accounts of US$4,49 billion, foreign exchange auction system US$1,97 million and the interbank market of US$309 million.
“In line with the bank’s commitment to regularly keep the public informed of development in the forex auction exchange market, the bank has published a list of beneficiaries and a schedule showing the total exchange payments by source amounting to US$6,7 billion,” Dr Mangudya said.
“From the inception of the foreign exchange auction system on 23 June 2020 to the end of December 2021, an amount of US$2,6 billion was allotted to the key sectors of the economy with US$2,2 billion being allotted through the main auction and US$358,2million through the SMEs auction.”
The schedule shows that the bulk of the forex payments throughout the year went towards the procurement of raw material and equipment.
This saw the last auction on December 14, allotting US$29,4 million of the grand total of US$41,8 million to both the main auction and Small and Medium Enterprises (SMEs).
“Of the bulk of the funds allotted in 2021, 62 percent went towards the payment of raw materials (US$777,2 million) and machinery and equipment (US$445 million) and US$749,2 million presenting 38 percent of the total allotments going towards payment for consumables, pharmaceuticals and other needs of the economy,” said Dr Mangudya.
The Government introduced the forex trading system on June 2020 as part of measures to stabilise exchange rates against United States dollar and provide a better and formal way for businesses to get foreign currency.