We’ll not raid FCAs, minister reassures depositors

Zimbabwean Finance Minister Mthuli Ncube looks on during the swearing in of new cabinet ministers at State House in Harare, Zimbabwe, September 10, 2018. REUTERS/Philimon Bulawayo

Finance and Economic Development Minister Professor Mthuli Ncube yesterday assured Foreign Currency Account (FCA) holders that Government will not raid their hard currency, instead adequate measures will be put in place to ring-fence them.

Prof Ncube said the decision by the old dispensation in which corporates, embassies and individuals lost their hard currency after they were raided will not “happen again under my watch” as people would access their money on demand.

The Head of Treasury said this last night while responding to questions from journalists during a Press briefing on Cabinet resolutions.

Cabinet met yesterday as per tradition. Journalists had asked what assurances were there that Government through the central bank would not raid FCAs as what happened in 2008 when account holders lost their money as the Reserve Bank of Zimbabwe performed quasi-fiscal activities.

“I want to assure you that these FCAs will not be raided. They have been ring-fenced. These are kept offshore and you have a mirror account (domestic) which reflects those accounts. You know what happened the last time we did that, when we shut them down, the US dollar just disappeared. So we have learnt that if you raid these FCA, if you shut them down, the US dollar disappears and you go back to disintermediation, which is what we have now,” said Prof Ncube.

“So we learnt a hard lesson. I would not recommend that to anyone to say raid people’s accounts. It is not a good idea, not under my watch if I am allowed to watch over those FCAs as Minister of Finance.”

Prof Ncube said Government would put enforcement measures to ensure the policy announced this week in which foreign trucks on transit must buy fuel at local service stations in foreign currency.

There had been complaints that the policy measure might fuel rent seeking behaviour and corruption as foreign truck drivers might just engage locals to buy fuel on their behalf.

“On the truckers, where is your problem with the truckers? We have just laid down the law to say you will have to pay using US dollars, people can evade that, we need to think of enforcement mechanism but the principle of them paying in US dollars is a good one.

“The same for anyone coming to buy groceries, we are aware that our groceries are quite attractive because of prices we want to insist that they use US dollars but they might try to avoid that,” said Prof Ncube.

“I cannot assure you that there will be no leakages.”

Prof Ncube defended levying of two cents per every dollar on every electronic financial transaction such as Real Time Gross Settlement (RTGS) or mobile money transfers saying that was meant to broaden the tax base.

He said Government was prepared to review any policy if it failed to produce intended objectives.