Zimbabwe telecommunication companies saddled with legacy debt have appealed for increased foreign currency allocation to service their infrastructure.

In an effort to ensure the transparent and efficient distribution of foreign currency – and determine the Zimbabwe dollar (ZWL) exchange rate, the Reserve Bank of Zimbabwe (RBZ) replaced the interbank market with weekly foreign exchange auctions which began on 23 June 2020.

RBZ announced that it will discard the 1:25 fixed interbank exchange rate system, which had been in place since February 2020.

Speaking before the Parliamentary Portfolio Committee on Information Communication Technology, Postal and Courier Service last week, TelOne senior finance manager, Bridget Hwata revealed various challenges being faced by the telecommunications industry and specifically access to foreign currency.

Hwata said: “We don’t have the foreign currency to service our infrastructure. We require US$2- million per month for our operational cost, but currently at the auction market we only bid US$ 300 000 per week, which is far below what we need.”

Hilda Mutsekwa, director of economics, tariffs and competition at the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) added: “The foreign currency that is being allocated to the telecom companies is inadequate. We have the vision to become an upper middle-income economy by 2030 and that means we need fast internet, like upgrading to the 5G system.”

ICT permanent secretary, Sam Kundishora pleaded with RBZ to allow telecommunication firms to abstain from participation in the auction system.

According to Kundishora the companies face challenges including delays with allocation of receipt funds and with acquittal forms.