Our dwindling forex reserves, our rising debt and falling exports have us heading for a balance of payment crisis in 2022.
We must manage our borrowings.
The Central Bank will have to reintroduce foreign exchange control forms for us to obtain forex.
As a result of forex control by the banks, importers now have to wait three months to get US dollars in quotas. For example, if one makes a request for US$50,000 the bank would release US$10,000 and not the full quota at one time.
As a result of Covid-19, most people are accessing US dollars through their credit cards-importers as well as individual shoppers. However while we have to pay the supplier in US dollars as well as freight charges, we are now faced with prices doubling when we have to pick up our packages at the courier facilities, not to mention the seven per cent OPT tax when you use your credit card.
Obviously the cost of living will increase along with the other variances. In the interim we keep getting fake news that all is well, but the mid-year budget review will show more borrowings.
If we don’t make a concerted effort to control imports and increase exports, we run the risk of returning to the IMF