Recently it was announced that grain farmers would be paid 30% of their dues in USD at the prevailing willing buyer willing seller rate on the date they make their first delivery. We wondered how that was going to work and now the GMB has offered some clarity. Farmers, much like civil servants have to open Nostro Accounts so that the government can deposit USD into these accounts.
The GMB is encouraging farmers to update their Nostro banking details with our supply chain managers at all depots throughout the country for timeous payments.
For those with GMB farmer cards, the Nostro accounts will be automatically generated in our system.
Will farmers be able to make a withdrawal?
Now for the big question, will farmers be allowed to withdraw money from their accounts? This has been the main gripe voiced by civil servants when it comes to their allowances which they are compelled to liquidate at the prevailing official rate of the day. Thankfully now, it is the willing buyer willing seller rate now being used these days. Before that, it was the paltry auction rate. Anyway, we do not know the answer to this question yet but all indications are that farmers will be allowed to withdraw as there don’t seem to be any limitations here.
In the original revelation by Finance Minister Ncube, it sounded like the farmers were getting paid in ZWL at the prevailing rate on the day of first delivery. That is how we understood his statement and it seems we were wrong. In hindsight, our interpretation did not make sense at all. Why would it be news that farmers would be paid in ZWL when they were already being paid in ZWL? But then again the government pays civil servant allowances in “USD” even when they ultimately get paid ZWL. In Zimbabwe, each means of payment ultimately becomes a “currency” in its own right. We had Ecocash and RTGS and now we have ZIPIT and Swipe. There is USD cash, Off Shore USD and Nostro USD. If you think USD is USD then you are mistaken.
- USD Cash is the most valuable you can use it however you want or keep it under your pillow. No one, except robbers, can take it away from you.
- Offshore USD is free USD, it’s beyond the reach of the Zimbabwean authorities although moving it will cost you.
- Nostro USD-here the word is simply being used to mean Foreign Currency Account. Why not just say that? That is a lesson for another day. The short sum of it is that there were FCA accounts which were forcibly converted into ZWL at a rate of 1:1. Using the adjective FCA would not have worked with such fresh traumatic memories in people’s minds. So a new moniker was coined. Already you have to pay 4% tax to make a payment using this currency. As you can imagine not many people want Nostro USD because like mist on a summer morning, it can disappear at the wave of the government’s magic wand. One Statutory Instrument and it will be gone, with immediate effect.