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Illicit trade in foreign currency must cease

by Staff reporter
15 November 2018 | 1296 Views
Recent action by government in which it imposed 10-year custodial sentences on illegal foreign currency dealers was overdue although more should be done to exterminate the practice completely.

The Unexplained Wealth Statutes came into effect on Monday, sending the bulk of the country's forex dealers underground.

Perhaps government should have combined this with other policy fundamentals that would push the money changers off the streets without using force.

When the inclusive government came into being in 2009, money changers - who had enjoyed so much during the hyperinflationary period - just went into oblivion because it was no longer tenable.

Zimbabwe is perhaps one of the few countries in the world that do not have Bureaux de Change outlets as these closed down in the early 2000s as the operating environment got tougher.

Government's action, hopefully, is not meant to punish those that are caught on the streets while leaving the owners of the money to go scot-free.

It is common knowledge that these money changers on the streets of towns and cities are mere runners who are sent to do business on behalf of powerful and moneyed individuals in society.

They must also be severely punished over and above having their money confiscated.

The recent turmoil in the economy has been a direct result of their activities as the rates they charged for foreign currency were not sustainable for business.

Manufacturers who sourced foreign currency from the black market obviously pushed their prices up, leading to the pricing mayhem and shortages witnessed on the market,
affecting mainly basic commodities and fuel.

Liquidity challenges affecting the economy are real and have led to companies queuing for foreign currency at the Reserve Bank of Zimbabwe (RBZ) list for days on end.

Access to the scarce foreign currency was always difficult, pushing some manufacturers who found themselves at the tail of the RBZ priority list to alternative sources.

The street dealers are, however, just conduits but the real players - who may continue to conduct their business covertly - are there in air-conditioned buildings within the country.

It was necessary for government to plug the existing loopholes in the financial services sector, ensuring the illicit trade has very little room to survive.

However, this should be complemented by policy shifts that would allow for realistic rating of the value of the bond note against the United States dollar.

Trade Cease Stop

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Source: dailynews


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