A Zimbabwean businessman crosses from the South African border to Zimbabwe after stocking up on bread for his customers at Beit Bridge. Pressure groups believe the country’s economic situation has not improved. Photo: Paballo Thekiso
Harare - Zimbabwe foreign payments backlog had improved to $185 million (R2.5 billion), the country’s central bank said, attributing the situation to firming earnings from tobacco and mineral exports.

The bank’s governor John Mangudya last week said the liquidity situation in the country had improved.

Mangudya said good agricultural production and the turnaround of the mining sector had helped to breath fresh impetus into the economy with good foreign exchange spin-offs. “Foreign exchange allocations to funded accounts have also addressed the fictitious overdraft-driven demand for foreign exchange.”

“The [central] bank’s allocations have significantly reduced the real demand for foreign exchange but have also reduced the foreign payments backlog by more than 50 percent to the current level of $185 million.”

The central bank has been allocating $100 million into the Zimbabwean economy every week, drawing down from tobacco and mining earnings as well as capitalising on a foreign currency payments stabilisation facility availed by the African Export-Import Bank (Afreximbank).

Pressure groups, however, believed the economic ­situation in the country had not improved.

The #Thisflag and the #Tajamuka groups said investors were still boycotting the country and that the government issued bond notes had not worked.

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“The economy is worsening, there is no investment and we have a cash crisis because bond notes have not worked but served to take away the few US dollars from circulation.

“Business is now a nightmare to run in Zimbabwe,” Pastor Evan Mawarire of the #ThisFlag social movement said this week.

But the central bank said cash deposits at banks and into Nostro holdings (foreign currency accounts held by local banks to process transactions and receipts on behalf of clients) had increased nearly 50 percent to $450 million.

“The US dollar cash deposits and the foreign exchange held in Nostro accounts are over and above the $140 million of bond notes, $23 million bond coins and an estimated $400 million to $600 million in circulation in the economy,” revealed the central bank.

Analysts at IH Securities said in a report this week that “cash and forex payment challenges persisted during the month of April, with the economy continuing to reel under pressure”.

The analysts said new projections continued to point to economic recovery only in the in the medium term.