RBZ Expected To Announce Tobacco Payment Modalities

The governor of the Reserve Bank of Zimbabwe (RBZ), Dr. John Mangudya is expected to present this year’s monetary policy statement any time from this week going forward during which he is expected to announce payment modalities for tobacco producers.

Tobacco Industry and Marketing Board (TIMB) chief executive officer Dr. Andrew Matibiri told Chronicle in an interview in Harare recently the government was yet to announce the modalities. Matibiri said:

We are still waiting for the Reserve Bank to decide, at the moment we don’t know. I think maybe in about a week’s time we would be knowing.

I think we are waiting for the monetary policy statement first, but its (monetary policy statement) due sometime this week.

Payment issues have in the past affected the farming and selling of the crop with some farmers choosing to shun the crop while others would not sell the crop at the government auctions.

Last year, tobacco farmers were paid half their earnings through their Zimbabwe dollar accounts with the remaining half being deposited into their Foreign Currency Accounts.

However, most farmers faced difficulties in accessing their hard currency due to failure to appreciate the processes involved.

Disagreements over pricing and payment modalities have resulted in low production which has also translated in low foreign currency into the Southern African country.

Recently, stakeholders in the tobacco industry expressed their fears over the possibility of price manipulation due to the demise of the auction system as it emerged that the majority of farmers were financed by contractors.

That means that very little volume will be sold through the auction system, therefore, the auction system might not be able to determine the minimum grade price of tobacco since the volumes that go through the auction are insufficient.

More: Chronicle