ZIMBABWE: US Clothing Exports Subsidised By Government
Zimbabwean clothing and textile exporters are being compensated for low US export prices in a deal approved by the government.
The 20 per cent subsidy effectively means that all woven and ready-made knitted garments exported to the United States from 1 July 2001 onwards attracts an exchange rate of 66 Zimbabwe dollars to the American dollar.
Harare was left out of America's African Growth and Opportunity Act (AGOA) because of its poor human rights record, and manufacturers are now forced to put low prices on US export orders to remain competitive with their AGOA-approved neighbours.
Documents uncovered by South Africa's Financial Gazette are said to reveal that the central Reserve Bank of Zimbabwe (RBZ) pays US$0.20 at the official exchange rate for every US$1 earned by textile and clothing exporters and received in Zimbabwe through normal banking channels.
Upon receipt of payment, certified copies of CD1 forms, used by exporters to declare their earnings, must be forwarded to the RBZ within 90 days. The RBZ then pays the exporter from a special fund maintained at the central bank and set up by the government for the purpose.
Mashonaland Chamber of Industries (MCI) president Misheck Nyamupingidza earlier this week confirmed that the textile sector has negotiated its own exchange rate.
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