Taskforce to clampdown on Zimbabwean currency manipulators

THE Reserve Bank of Zimbabwe (RBZ) is setting up a taskforce consisting of various law enforcement units to enhance capacity to arrest the indiscipline in the financial system. This comes after the Joint Operations Command (Joc) applied pressure on the RBZ’s Financial Intelligence Unit (FIU) to firmly deal with illicit financial transactions.

The central bank’s foreign currency auction platform has allegedly been abused by “unscrupulous elements”.

The Zimbabwe Independent is informed that the team would comprise members of the FIU, the Zimbabwe Anti-Corruption Commission (Zacc), the National Prosecuting Authority (NPA), the Zimbabwe Revenue Authority (Zimra) and the Zimbabwe Republic Police (ZRP). According to RBZ officials, lack of a coordinated approach in dealing with financial crimes has culminated in some law enforcement units getting compromised by the violators. Hence, the taskforce is expected to plug the loopholes.

“Plans to set up a taskforce team are at an advanced stage and the idea is to make sure no one is compromised.  Remember FIU has no arresting or prosecuting powers. In the past there have been cases which failed to take off as some law enforcement units were compromised,” the official said.

RBZ governor John Mangudya did not respond to questions sent to him while FIU director general Oliver Chiperesa was not available for comment.

The recent concern raised by security chiefs over arbitrage and rent-seeking behaviour draining the foreign currency auction system of the scarce United States dollar is likely to witness a fresh clampdown.

The security chiefs from the army, police, and Central Intelligence Organisation and prison services described the financial situation as a “national security matter” at a high level meeting last month.

The tumultuous behind-the-scenes events at the forex auction have contributed towards the continued depreciation of the local currency and fuelling of inflation.

The erosion of workers’ earnings poses a security threat, according to some of the thorny issues being raised by the country’s security establishment.

The black market forex rate has soared to US$1:ZW$240 while the official figure stands at US$1:ZW$127,4 but most retailers are pegging prices of goods and services at parallel market rates.

Vice-President Constantino Chiwenga recently issued a chilling warning against foreign currency exchange-rate manipulators claiming the government had honoured business demands but efforts to revive the economy were being derailed by economic saboteurs. He threatened to take action against those externalising funds.

The FIU has been trying various tactics to address the indiscipline but inadequate capacity and continued non-compliance by banks has made the auction platform a gold mine for unscrupulous elements.

Some companies have been accessing millions of United States dollars on the auction but basic investigations could not locate their physical addresses.

Some companies that have to date accessed close to US$15 million do not even have a website or a physical address.

This culminated in the suspension of close to 170 companies from participating at the auction but there are indications that the same companies have been bouncing back using different shelf companies.

Some companies whose type of business could not be ascertained make up the top 50 of those that accessed foreign currency on the auction in 2021.

Source – The Zimbabwe Independent