Zimbabwe: Govt Issues Directive for Multi-Currency Use Within Departments, Parastatals

GOVERNMENT has given its ministries departments, parastatals and local authorities a two-week deadline to set up mechanisms to pay for goods and services in other currencies that are within the multi-currency regime, other than the United States dollar to mitigate against the prevailing cash crisis.

Anyone intending to make payments to entities and institutions directly or indirectly controlled by State would soon be able to approach banks for approved currencies to make such payments. Key institutions that are targeted include parastatals or State enterprises and Government institutions such as ZESA, National Railways of Zimbabwe, TelOne, NetOne, Air Zimbabwe, the Zimbabwe National Road Authority and local authorities.

Finance and Economic Development permanent secretary Willard Manungo said in a statement directed to heads of government ministries that institutions and departments were expected to have adopted the new payment mechanism system by June 30. The directive follows complaints that some government agencies have been rejecting payment in rand.

In terms of the order, the departments are expected to introduce a multi-currency pricing structure that will also include the bond notes, when they are introduced as expected this October.

Bond notes, a local equivalent of the US dollar, are backed by a $200 million African Export and Import Bank bond facility and will trade at one as to one with the greenback.

The institutions are required to accept payments in any of the multi-currencies and open bank accounts for the respective currencies or alternatively sell to the Reserve Bank of Zimbabwe. This comes as the central bank has configured the RTGS system into a multi-currency platform set to include five currencies in line with the May policy measures.

Manungo said the new measures would also be extended to other businesses including hotels, on a voluntary basis.

“Government ministries, government departments, local authorities and parastatals are key players in the adoption of use of multi-currencies given the extent to which they transact with the public. In this

respect, it is critical that such entities also adopt measures that facilitate restoration and promotion of the multi-currency system,” Manungo said.

“Accounting officers are therefore required to urgently arrange for departments and institutions under their purview to embrace application of the multi-currency arrangement in payment transactions

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Source: All Africa