Finance Minister Ncube Pledges Continued Crackdown on Illegal Currency Trading

Prof. Mthuli Ncube
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HARARE, Zimbabwe — Finance, Economic Development, and Investment Promotion Minister, Mthuli Ncube, has affirmed the government’s unwavering stance on cracking down on illegal foreign currency traders and businesses rejecting the newly introduced ZiG currency or using parallel market rates.

During a National Assembly question and answer session, Ncube addressed parliamentarians’ concerns about businesses pricing goods in ZiG but based on black market rates.

“We really mean business and want to ensure that our law enforcement agencies are equipped to enforce compliance with the official exchange rate,” he said, as quoted by The Herald.

Ncube stated that the Financial Intelligence Unit (FIU) has been tasked with scrutinizing the entire value chain—from manufacturers to retailers—to ensure adherence to the law.

Since the launch of the ZiG currency over a month ago, a police operation has resulted in the arrest of 224 illegal money changers, while the FIU has frozen 90 bank accounts and fined over 40 individuals for violating the Exchange Control Act.

Ncube also discussed government strategies to boost demand for the ZiG and reduce reliance on the US dollar. He emphasized the importance of stabilizing the ZiG to increase its acceptance as a transactional currency. “The second issue is to create super demand for the ZiG, and we will soon be announcing which taxes would be paid exclusively in ZiG,” he added.

Zimbabweans’ skepticism towards the central bank, the Reserve Bank of Zimbabwe, stems from a history of hyperinflation in 2008, which saw the issuance of ZWD$10 trillion notes. Following this period, Zimbabwe abandoned its currency, relying instead on foreign banknotes like the US dollar and South African rand.

In late 2016, Zimbabwe introduced the bond note, which lost value due to excessive money printing. On April 5, 2024, the government launched the ZiG currency, aiming to stabilize the economy. Despite this, public response has been cautious, with many Zimbabweans continuing to favor the US dollar for transactions, which still accounts for 85% of their dealings.

The ZiG replaces the existing ZWL bond notes and the Zimbabwean dollar, in an effort to restore confidence in the local currency.