Zimbabwe has gone a couple of weeks without the government unleashing an earth-shattering statutory instrument so the powers be must have deemed the time was now ripe for them to unleash Statutory Instrument 131 of 2022. Dubbed the Exchange Control (Payment for Electricity and Related Services in Foreign Currency by Exporters and Partial Exporters) Order, 2022 the law basically means that “exporters” will now be compelled to pay their ZESA bills in foreign currency as ZESA is now authorised to bill them in foreign currency. Knowing how every entity loves foreign currency ZESA will not pass on the opportunity to send USD bills to exporters.
The two relevant sections of the law read like this:
ZESA shall be allowed to bill in United States dollars or the equivalent in Euro or any other [foreign] currency.
..An exporter billed by ZESA in United States dollars [or any other foreign currency] shall pay the bill for the electricity supplied by ZESA in United States dollars or the eqiuivalent.The law compelling exporters to pay their bills in foreign currency
The government reveals in hypocrisy
As we noted in an article published earlier more and more items are now being sold exclusively in foreign currency. It began with fuel and duty for cars but now we even have basics like cooking oil, sugar and milk being sold in foreign currency only even in formal supermarkets. The government has castigated this behaviour equating it to economic sabotage even as they continue to carve up exceptions for themselves and their ilk. In a recent show of anger, they punished Schweppes by revoking its import duty exemptions for selling in foreign currency only. What is good for the goose ought to be good for the gander as well but it seems the government does not agree. They alone should be accorded the privilege of charging exclusively in foreign currency.
The government’s cunning does not even stop there. You see every exporter is required to convert some of their foreign currency proceeds at the official rate. The government wants exporters to use their share, the money they are allowed to keep to make the payment. This means more foreign currency goes to the government as opposed to the case where exporting companies would be allowed to deduct the amount to ZESA before they make submissions to the RBZ.
Do not worry it is all for a noble cause
The government really wanted this law to land softly and made sure we know what the foreign currency they will raise through foreign billing will be used for.
- Purchasing electricity outside Zimbabwe
- Import spare parts, critical assets and components needed to maintain the local generation transmission, distribution and retail infrastructure of the electricity network to ensure sustainable supply. For the avoidance of doubt, you should know that Range Rovers and other top-of-the-range vehicles for bosses do count as critical assets.
- Payment of external insurance for critical infrastructure
- Payment of external loan repayments
The Minister of Finance Economic Development has been tasked with keeping an eye on this ZESA account because he has done such a wonderful job with other state funds like the 2% tax. He is a wonderful man who is to be trusted with all this money which exporters will be happy to pay. We should celebrate because our power woes are suddenly going to be over.
For the avoidance of doubt, the last parts are full of sarcasm. The order is also going to last six months when it will certainly be renewed because the government loves milking exporters and will not give up their piggy bank.