The objective of the engagement was to seek clarity on Statutory Instrument (SI) 142 of 2019 and the subsequent RBZ Directives. The engagement was a result of a membership meeting where NANGO members resolved to seek clarity and commitments from the Governor.
The Governor clarified the provisions of SI142/19 and assured NGOs that the Bank is implementing these reforms in view of creating a constructive environment for all sectors to thrive. This he said is envisaged to ultimately contribute to economic growth and development.
The Governor clarified that:
- SI 142/19 compliments SI 133 which came to establish the exchange rate between the Zimbabwe Dollar and other currencies. Further, it came to facilitate local purchases that should be done using local currency.
- As such, the SI is effective at the point of purchasing goods within the local market where all domestic purchases are to be done using the Zimbabwe Dollar.
- He asserted that this is facilitating a process of transitioning to normalcy within the Monetary Policy Framework.
- NGO employees who were being paid in foreign currency will still maintain their contract in foreign currency and can withdraw their salaries in foreign currency. However, when they want to buy from local shops they will have to change to local currency from Banks and Bureau De Change.
- Thus to further ensure effective implementation of the Statutory Instrument, the RBZ will be issuing guidelines that should guarantee that there are no inconsistencies among banks and other agencies.
The Governor assured and committed to the following:
- He reiterated that NGO funds are free funds and are not subject to the Exchange Control Regulations. Thus, there will be no retention, expiry and deductions.
- The Governor, stressed that the Domestic Nostro accounts for NGOs will still be functional as in the previous monetary regime and NGOs can make transfers from one organisation to another or to make payments to sectors that are exempted.
- The RBZ is going to instruct all the banks to communicate an agreed position on how they should relate with NGOs.
- The RBZ highlighted that Banks were engaged and sensitised on SI 142/19 and how they should operate. In this regard, if NGOs face any challenges with their respective banks they are free to report to the RBZ.
- The Governor highlighted that they are going to review RTGS withdrawal limits considering the obtaining prices of commodities due to inflation.
- The Reserve Bank will facilitate access to Zimbabwe Dollar for NGOs who would like to disburse huge sums of money to communities on cash basis.
- The Government is considering putting in place a system where some designated service stations will be selling fuel in USD for Embassies, Development Partners and NGOs who may want to purchase fuel in USD.
- As a fiscal Advisor, the Governor will advise the Minister of Finance and Economic Development on the tax regime which is in relation to people earning in USD.