Monetary policy: Here are all the other key non-ZiG news you might have missed

(pic: Reuters)

The big story of the monetary policy statement was, naturally, authorities’ latest currency gambit – the gold-backed ZiG.

But, in the clutter, there are other tales from the statement that may have gone unnoticed. From falling exports to the state of banking, we list here some of the key issues that you may have missed from governor John Mushayavanhu’s policy document.

Exports are falling

Zimbabwe depends on minerals for 80% of its exports. The fall in global mineral prices is bad news for the economy. Mineral exports fell by 7% to US$5.2 billion, from US$5.5 billion in 2022. This was mainly because of a big fall in platinum earnings, which dropped sharply by 37% from US$2.2 billion in 2022 to US$1.4 billion in 2023. Gold output also fell by 14.7% in 2023. This meant earnings were 11% down from US$1.9 billion in 2022 to US$1.78 billion million in 2023

As a result, Zimbabwe’s total exports eased from US$7 billion in 2022.

Bigger agric exports

The fall in exports could have been bigger had it not been for stronger performance from agriculture. The country’s farm exports grew from US$1.067 billion in 2022 to US$1.3 billion in 2023. This was mostly made up of tobacco exports, sugar and crocodile skins.

Apart from raw tobacco, Zimbabwe also exported US$105.9 million worth of cigarettes, 64.1% more than in 2022. Manufactured exports went up 19.1% to US$430.7 million. Sugar exports rose by 46.2% to US$28.3 million in 2023.

What are we importing?

Zimbabwe imported 4.9% more goods in 2023, up to US$8.52 billion from US$8.1 billion in 2022. The increase was due to higher imports of fuel, machinery, electricity, and grain.

Food imports registered a 15% increase, from US$519.9 million in 2022 to US$597.9 million in 2023, driven by growth in grain imports. While Zimbabwe had a larger wheat crop, it still imports “hard wheat” for blending to make bread. Private millers also stepped up grain imports after the government liberated maize trade.

Lithium exports up

Exports of lithium surged as new processing plants came onstream in 2023. Exports rose by 854.7%, from US$70.6 million in 2022 to US$674.0 million in 2023. However, as production matures, exports are likely to be affected by weaker prices.  

How much from the Diaspora?

Diaspora remittances through the official channels rose by 16% to US$1.873 billion in 2023, from US$1.617 billion in 2022.

What’s happening in the banks?

Reflecting the USD’s dominance, 84.67% of bank loans were in forex in 2023. The productive sector got 72.7% of all bank loans. Agriculture got 14.5% of the productive sector loans, followed by manufacturing at 12.6%, with mining and distribution getting 11.3% each.

Banks make most of their money from the fees they charge customers. They made 19.58% of their income from fees, versus 12.5% from interest earned from loans. In total, non-interest income was 84.27% of bank’s total income. This shows the impact of liquidity shortages and high interest rates, which have prevented banks from lending.

According to RBZ, small businesses are getting less than 5% of total bank loans, women get below 8%, while just 3% of loans are going to the youth.

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