HARARE, March 30, 2016 (Xinhua) -- Traders inspect the packed tobacco leaves as the 2016 sale season begins at the Tobacco Sales Floor in Harare, Zimbabwe, March 30, 2016. The output of tobacco, Zimbabwe's top export earner, is expected to fall by 15 percent to 160 million kg in 2016 after an El-Nino induced drought that has left up to four million people in need of food aid, officials estimate. (Xinhua/Stringer)
HARARE, March 30, 2016 (Xinhua) -- Traders inspect the packed tobacco leaves as the 2016 sale season begins at the Tobacco Sales Floor in Harare, Zimbabwe, March 30, 2016. The output of tobacco, Zimbabwe's top export earner, is expected to fall by 15 percent to 160 million kg in 2016 after an El-Nino induced drought that has left up to four million people in need of food aid, officials estimate. (Xinhua/Stringer)

The Reserve Bank of Zimbabwe (RBZ) announced Friday that tobacco farmers will now be allowed to retain 50 percent of their foreign currency earnings in their Nostro FCA accounts for an indefinite period as it seeks to boost production of the crop.

“To facilitate adequate preparations and importation of inputs for the next growing season, the foreign currency entitlements for growers shall be treated as free funds and may be retained in their FCAs for an indefinite period.

“For the avoidance of any doubt, holders of such funds are permitted to conduct inter-FCA transfers or effect foreign payments without any restrictions and the FCA balances will not be subject to any liquidation requirements,” RBZ governor John Mangudya said in a joint statement with the Tobacco Industry and Marketing Board (TIMB).

Mangudya said the 50 percent foreign currency portion will be paid directly into growers’ FCA bank accounts while the balance shall be deposited into growers’ local currency bank accounts.

“Tobacco growers who do not have FCAs are advised to open FCA accounts,” Mangudya said.

The new measures came after the RBZ and TIMB engaged stakeholders in the industry including tobacco merchants, tobacco auction floors, and representatives of tobacco growers.

Growers were last year frustrated by the arrangement to split the payments in foreign and local currency, arguing the local currency gets wiped out by ever increasing cost of inputs.

They also complained about challenges in getting payment in foreign currency.

Tobacco is Zimbabwe’s largest foreign currency earner. The country is the largest producer of tobacco leaf in Africa, and the sixth in the world.

Last year, the country sold about 259 million kilograms worth about 518 million U.S. dollars. Enditem

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