The ManicaPost
AT a time when Government is working round the clock to ensure that the country’s economy attains middle income status by 2030, currency manipulators are pushing their weight in an effort to create a hyper-inflationary environment that will ultimately degrade the standard of living for the majority of Zimbabweans.
The Reserve Bank of Zimbabwe, the country’s monetary authority, is having a torrid time as it tries to suffocate the black market through promotion of the use of the local currency and reining in market indiscipline.
Only last week, President Mnangagwa announced a raft of measures that are designed to defend the local currency against economic saboteurs’ machinations which are threatening Zimbabwe’s economic stability.
Among the interventions announced, banks will no longer be extending loans to Government, the private sector and individuals, thereby putting a plug on the speculation against the Zimbabwean dollar as some borrowers have been using the funds to trade in forex.
Transacting in local currency also becomes cheaper as ZWL transfers will only attract a two percent intermediated money transfer tax against the four percent that will be charged on foreign currency transfers.
These interventions come at a time when breaches of the Bank Use Promotion Act have become more prevalent, particularly in schools and pharmacies were the public is parting with their foreign currency at rates that are way above the official exchange rate.
While the official rate is currently sitting on 173,27:$1, the black market rate is already hovering around ZWL400 for a single United States dollar.
Some rent-seekers have also been abusing the official exchange market by getting cheaper money there and then selling their goods at the black market rate.
The financial indiscipline of these companies has seen prices of goods and services rising arbitrarily.
Those caught on the wrong side of the law have been fined, while others have had their bank accounts frozen or blacklisted.
Recently, 256 companies were charged by the RBZ’s Financial Intelligence Unit (FIU) for illegally dealing in foreign currency.
As Government moves with speed to address the market indiscipline and preserve the gains achieved through the Transitional Stabilisation Programme (TSP) and now the National Development Strategy (NDS1), more heads are expected to roll.
For instance, although widespread, making use of varying rates for local currency payments, foreign currency and mobile money is actually a violation of the country’s finance and banking laws.
To that end, the public must play a part in discouraging this practice by reporting to the responsible authorities whenever they come across such businesses.
It is also an offence for anyone or any business to refuse to accept the local currency.
But considering that the RBZ’s FIU has no arresting or prosecuting powers, perhaps it is time for the unit to join hands with the Zimbabwe Anti-Corruption Commission (Zacc), the National Prosecuting Authority (NPA), the Zimbabwe Revenue Authority (Zimra) and the Zimbabwe Republic Police (ZRP) to arrest the indiscipline in the financial system.
A joint team will certainly plug the loopholes that have seen financial crimes taking root in the various economic sectors.
Companies engaging in local currency manipulation and unjustifiable price increases deserve to lose their operating licenses.
