The Horticultural Development Council (HDC) has expressed concern over the Reserve Bank of Zimbabwe’s (RBZ) decision to reduce the foreign currency retention threshold for exporters from 75% to 70%.
HDC CEO Linda Nielsen said that this policy change poses major challenges for Zimbabwe’s horticulture sector, which depends on foreign earnings to sustain operations, drive growth, and remain competitive in global markets. Said Nielsen:
<blockquote>
The horticulture industry operates within tight cost margins, with most inputs such as power, fuel, seed, fertilisers, packaging, and freight-denominated in US dollars.
The reduction in forex retention means exporters will have less hard currency to meet these critical expenses, placing strain on cash flow and investment in the sector.
Producers of export-oriented crops such as peas, which have high production and logistics costs, may be forced to scale back operations.
Some farmers may pivot to alternative crops and shift focus to local cash markets, which do not provide the same foreign currency inflows or long-term economic benefits as exports.
</blockquote>
Nielsen reiterated the HDC’s previous recommendation that local utility providers, such as ZESA and municipal authorities, should charge for their services in ZiG to align with the new foreign currency retention framework.
She explained that exporters are currently required to pay many domestic obligations in foreign currency, creating an imbalance where they retain less forex while still facing high USD-denominated costs.
The HDC argued that adjusting local utility pricing to ZiG would ease the financial pressure on exporters and support the broader shift towards the use of the local currency.
In this regard, Nielsen urged policymakers to engage with the sector to find solutions that balance the need for foreign currency reserves with the long-term sustainability of Zimbabwe’s horticulture industry.
She added that a stable and predictable policy environment is essential for maintaining Zimbabwe’s competitiveness in regional and global horticulture markets.

Pindula News

Zimbabwe's horticulture industry is worried because the Reserve Bank is reducing how much foreign money they can keep. This is a problem because most things they need to run, like power and seeds, are bought in US dollars. Having less foreign money will make it hard to pay for these things, and some farmers might have to stop growing certain crops. The industry wants local services to charge in Zimbabwean dollars to help them with costs. They want the government to talk to them and find solutions so that Zimbabwe can still be good at selling its products to other countries.

Foreign Currency Retention Cut Threatens Zimbabwe's Horticulture Sector, Says Nielsen

The Reserve Bank of Zimbabwe has lowered the foreign currency that exporters can keep from 75% to 70%.
This means exporters, like those in mining and agriculture, can now only keep 70% of their earnings in US dollars, with the rest paid in Zimbabwe Gold (ZiG).
Exporters had previously argued that keeping only 25% of their earnings in ZiG was like a tax, and they wanted to keep 85% of their earnings in US dollars to protect their businesses.
However, the RBZ Governor, John Mushayavanhu, decided to take a larger share of the foreign currency to help raise more US dollars and support the Zimbabwean dollar.
Mushayavanhu announced the decision when he presented the bank’s 2025 Monetary Policy Statement, on Thursday, 06 February. He said:
<blockquote>
In order to guarantee continued stability in the interbank foreign exchange market through augmenting the supply of foreign currency, as well as building the critical foreign currency reserves needed to anchor the ZiG, the foreign currency retention level for exporters has been reduced from 75% to 70%, with immediate effect.
This implies that the effective surrender portion of export proceeds has been increased from 25% to 30%.
This review is consistent with the increased use of ZiG in the economy. The additional 5% will ensure that exporters mobilise sufficient ZiG to meet local currency obligations and other expenses, including tax payments, going forward.
</blockquote>
Mushayavanhu said exporters concerned about losing value can deposit any excess ZiG into a special RBZ fund. They will be able to withdraw it at the official exchange rate whenever needed. He said:
<blockquote>
In order to ensure preservation of value, exporters with no immediate use of the ZiG equivalent of the additional 5% of the export surrender proceeds will have an option to invest the funds in a USDDDF at the Reserve Bank which they can withdraw in ZiG on demand, at the prevailing interbank exchange rate on the settlement date.
</blockquote>
However, this is unlikely to please exporters. Most of their costs, like buying materials and paying workers, are in US dollars.
So, when they only get 70% of their earnings in US dollars, they lose money. For large exporters, energy bills— their biggest expense—are also paid in US dollars.

The Reserve Bank of Zimbabwe has reduced the amount of foreign currency exporters can keep from 75% to 70%. This means they can only keep 70% in US dollars and must receive the rest in Zimbabwean dollars. The RBZ Governor made this decision to increase US dollars and support the Zimbabwean dollar. Exporters can deposit excess Zimbabwean dollars in a fund and withdraw when needed. However, most exporters are unhappy as their expenses, like buying materials and paying workers, are in US dollars. This means they lose money when they receive only 70% in US dollars from their export earnings.

RBZ Lowers Exporters' Forex Retention To 70%

The mining industry has proposed increasing the foreign currency retention threshold from the current 75% to 85%. This change would enable miners to better meet their funding requirements, reported <a href="https://www.herald.co.zw/miners-seek-85pc-exports-retention/">The Herald</a>.
In 2023, the Reserve Bank of Zimbabwe (RBZ) had already increased the foreign currency retention threshold for exporters from 60% to 75%.
This adjustment came after exporters complained that the high export surrender requirements made it difficult to access foreign currency for critical expenditure and financing operations.
Mining companies require foreign currency to cover a range of essential expenses, including paying for electricity, which is billed in hard currency, importing critical production inputs, procuring local inputs that are priced predominantly in foreign currency and other necessary financing and operational needs.
In its latest report on the state of the mining industry and prospects for 2025, the Chamber of Mines of Zimbabwe said:
<blockquote>
The current 75 percent foreign currency retention is inadequate to meet operational requirements and funding expansion projects.
The average foreign exchange retention that meets the mining industry’s foreign currency requirements is at least 85 percent.
</blockquote>
According to the Chamber of Mines, the mining sector plans to spend US$600 million on capital expenditure projects. Additionally, mineral exports are projected to reach US$6 billion in the coming year, up from US$5.5 billion in the current year.
The mining industry is a crucial economic driver for Zimbabwe, accounting for:
<ul>
<li>Over 70% of Foreign Direct Investment (FDI)</li>
<li>80% of exports</li>
<li>19% of government revenues</li>
<li>3% of direct formal employment</li>
<li>13.5% of national income</li>
</ul>
Due to ongoing expansion projects in the sector, the number of formal jobs in the mining industry is anticipated to increase by close to 3% next year, rising from the current 57,000 to around 58,700 positions.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The mining industry in Zimbabwe wants to be able to keep more foreign currency to help with their expenses. They currently keep 75% of the foreign currency they earn, but want to increase it to 85%. This change will help them pay for things like electricity and buying materials they need. The mining industry is a big part of Zimbabwe's economy, bringing in a lot of money and providing jobs. They have plans to spend a lot of money on new projects and expect to export even more minerals in the future. The government is considering their proposal to increase the foreign currency retention threshold.

HDC Latest News

Latest Jobs