Money transfer agents have taken over the role of banks by making payments at a fee for companies that want to pay for raw materials and other imports, a move that is set to increase costs to companies.
BY VICTORIA MTOMBA
The development follows delays by banks in processing payments via telegraphic transfers, which has seen some transactions going for four weeks without being cleared.
An industrialist told Standardbusiness last week that companies were making payments through money transfer agents who charge them 10% for foreign payments.
“For instance, when I want to pay $100 000 to my supplier who is outside Zimbabwe, I pay $110 000 including the 10% that the agent charges me to make the payment.
“I will do it because if I try to use the formal channels, I have to wait in a queue so that my payment can be made by the bank after two weeks at the most,” the industrialist said.
“It’s now difficult to pay foreign suppliers at the moment using the formal banking channels. This creates a huge challenge for the manufacturing sector as this is now a new cost that is being added to them.”
The industrialist said the transfer agents also reduce the cost if cash is used as payment, levying a fee of 3% for the transactions.
Confederation of Zimbabwe Industries president Busisa Moyo told Standardbusiness last week that real time gross settlement (RTGS) balances were not transferable for import payments according to banks, but cash deposits resulted in payments outside Zimbabwe being honoured. He said most companies imported raw materials.
“We have also received information that there are ‘transfer agents’ charging 7,5% to 10% for facilitating payments outside Zimbabwe,” Moyo said.
“This creates uncertainty around accepting RTGS transfers but this will improve as banks pay foreign suppliers as was happening before April 1.
“This will increase the cost of products and demand usually drops off at high prices and it incentivises smuggling as well.”
The country started experiencing challenges in making transfers this year when cash shortages began.
Moyo said with the shortage of cash, he believed banks gave companies the option of either exporting or depositing cash to allow for foreign payments.
Zimbabwe National Chamber of Commerce president Davison Norupiri said making payments through agents would increase the cost of production and quicken the outflow of money from Zimbabwe.
He said the central bank should try to make the payments instead of preserving the cash.
“They [banks] are slow in moving the telegraphic transfers, there is no money in the nostros. It’s slow to use the banking channels for making foreign payments,” he said.
“We are queuing for about two weeks and we try to make sure we make our payments well in advance.
“If we keep on experiencing the same situation, suppliers will not release the products to us.”
Norupiri said suppliers were now delivering goods based on past relationships and may soon demand to be paid first before releasing the goods.
Efforts to obtain comment from the Bankers Association of Zimbabwe were fruitless as the association’s president Charity Jinya was said to be out of the country.
The Grain Millers’ Association of Zimbabwe has since warned that the delays threatened food security as grain imports would be constrained.
The millers are set to meet Reserve Bank of Zimbabwe (RBZ) governor John Mangudya soon over delays in payments for grain imports.
The economy is facing cash shortages, with the RBZ citing the high import bill and externalisation as the main causes. RBZ has put in place a number of measures such as capping withdrawals and reducing service charges to promote the use of plastic money.