Tourism sector gets huge boost as RBZ greenlights 100% forex retention

Albert Chavhunduka

Registered tourism players shall with immediate effect retain 100% of their foreign currency earnings, a move that is set to allow the sector’s recapitalisation the Reserve Bank of Zimbabwe (RBZ) has said.

This comes at a time when the sector last month received a massive boost through tourist arrivals after international airline Fly Emirates resumed passenger flights to Zimbabwe.

The airline had indefinitely suspended its passenger operations to South Africa, Zambia and Zimbabwe in November last year following the discovery of the Omicron variant in Southern Africa.

In the Monetary Policy Statement for the year 2022 announced this week, the RBZ said the move is meant to ensure the sector’s quick recover from the impact of COVID-19.

“In order to respond to the adverse effects of COVID-19 on the tourism sector, which was hard-hit by the pandemic not only in Zimbabwe but the world over, with immediate effect, players in the tourism and hospitality industry shall retain 100% of their foreign currency earnings to allow them to quickly recapitalize and procure the necessary goods and services required by tourists and travelers,” read the statement.

Small scale tobacco and cotton growers in the country are among other people set to benefit from a 75% export retention.

“The financing models for tobacco and cotton require a refinement of the export retention threshold to increase participation by small scale growers and to boost tobacco and cotton production in the country. Accordingly, the retention threshold for tobacco and cotton growers shall be increased to 75% for the forthcoming tobacco and cotton marketing seasons. The funds retained by the growers shall continue to be treated as free funds,” read the statement.

The tourism and hospitality sector which largely relies on travel was hard-hit by Covid-19 mitigatory measures.

The sector is said to have lost close to US$1 billion due to the Covid-19 pandemic last year,

Projections by the United Nations (UN) indicate that the impact of Covid-19 on tourism will cost the world economy US$4 trillion, with developing countries among the worst affected.

Alongside mining and agriculture, tourism is the third pillar that has anchored Zimbabwe’s stressed economic environment.

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