RBZ Denies Paying Tobacco Farmers in RTGS

RBZ Denies Paying Tobacco Farmers in RTGS
Reserve Bank Governor John Mangudya

Zimbabwe’s central bank the Reserve Bank of Zimbabwe(RBZ) has denied reports that it will wholly pay tobacco farmers in  Real Time Gross Settlements (RTGS).

In a combined press statement with Tobacco Industry and Marketing Board (TIMB), RBZ said the nicotiana tabacum farmers are being paid 50% of their net sale proceeds into  Nostro Foreign Currency Accounts bank accounts (FCA accounts).

“As agreed with the players in the tobacco industry, the Reserve Bank of Zimbabwe shall ensure that all tobacco growers have accessed their entitlement of 50% of the net tobacco sale proceeds into their Nostro FCA bank accounts,” RBZ Governor John Mangudya said.

“In addition to accessing cash at a rate of RTGS$0.50 per kg of tobacco sold, and up to a maximum of RTGS$300, the small scale tobacco growers, (i.e. those growers with 2 hectares and below), are eligible for a United States Dollars cash withdrawal of USD0.10 per kg of tobacco sold per sale, up to a maximum of USD50.00, after their Nostro FCA bank accounts have been credited with the foreign currency entitlement.”

The denial follows local media reports of an RBZ circular stating that farmers will effectively be paid 100% in RTGS dollar.

“It appears the respective newspapers failed to understand the modalities that were agreed by the tobacco merchants and tobacco growers to ensure orderly marketing of the green leaf tobacco.”

“It is regrettable that some newspapers failed to interpret the payment modalities agreed between the Reserve Bank of Zimbabwe and the players in the tobacco industry, thereby choosing to publicise false reports which are counter-productive,” Mangudya said.

“The Reserve Bank and the Tobacco Industry and Marketing Board have opened lines of communication with tobacco growers and merchants, who are satisfied with progress on the payment modalities,” the RBZ explained.

Conflicting reports on the payment of farmers come at a time when there is a shortage of foreign currency in Zimbabwe.

The Tobacco farmers earlier reportedly rejected the RBZ’s exchange control measures which empowered the central bank to retain up to 70% of foreign currency export earnings from the leaf.

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