Timothy
Business Writer
The decision by the Reserve Bank of Zimbabwe (RBZ) to instruct banks, mobile money operators and other financial service providers, to freeze accounts operated by individuals abusing mobile telecommunications services, is likely to cause behavioural change on the market, according to analysts.
The Central Bank Governor Dr John Mangudya yesterday published a list of 30 individuals who are championing the illicit dealings and also barred them from accessing financial services for a period of two years.
Economist and member of the Reserve Bank of Zimbabwe Monetary Policy Committee, Persistence Gwanyanya, said the move by the central bank showed that some of the drivers of the alternative market have to do with behavioural issues.
“We have a sector of foreign currency traders who are earning a living in trading on the parallel market, therefore will do any action that is detrimental to the stability of the economy that has been achieved so far,” he said.
He said it had become a norm for the abusers to circulate and advertise on social media and has now gone beyond unprecedented levels that prompted the RBZ to act.
“A lot is now happening in the background within the FIU, and more abusers will be identified and proper action will be taken,” he said.
Gwanyanya noted that the country’s foreign currency management system is structurally weak.
“These interventions will send a strong message in the market to would-be abusers,” he said.
Dr Mangudya recently warned pharmacies that are receiving support from the foreign exchange auction trading system against pegging their prices using the parallel market exchange rate, saying such practices destabilised the economy.
Out of the over US$2 billion dispensed by the Central Bank through the auction so far, nearly US$132 million has gone towards supporting medical and chemical imports.
Gwanyanya said the central bank should also look into the activities of the fuel sector, which has almost fully dollarised despite some companies accessing foreign currency from the auction system.
“While the list is not exhaustive, it is a beginning,” he noted.
Announcing the names, Dr Mangudya said: “The Financial Intelligence Unit (FIU) has instructed banks, mobile money operators and other financial service providers to identify and freeze any accounts operated by these individuals and, further, to bar them from accessing financial services for a period of two years, with immediate effect.”
He said the FIU had also requested the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) to bar the said individuals from operating mobile phone lines.
Dr Mangudya indicated that the FIU, in collaboration with law enforcement agencies, will continue to monitor various social media and bank accounts to identify and take action against perpetrators of illicit dealings.
“Over and above the corrective measures of barring the delinquent individuals from accessing banking and financial services and operating mobile phone lines, the FIU has forwarded their names and particulars to law enforcement agencies for prosecution,” he said.
Dr Mangudya recently said the widening mismatch between the official exchange rate and parallel market rate was not due to weak fundamentals, but as a result of sentiment by some individuals.
However, experts are of the view that the growing disparity between official and parallel market exchange rates had a destabilising effect on formal businesses and gains of stability thus achieved so far.
In June this year, the central bank also named 18 companies which allegedly abused the foreign currency auction system under the recently promulgated Statutory Instrument (SI) 127 of 2021.
SI 127 of 2021 prohibits business operators from charging above the official exchange rate and empowers authorities to punish those that refuse to accept the Zimbabwe dollar for local transactions.
SI 127 of 2021 imposes fines of up to $1 million on firms found guilty of manipulating the auction system and abusing foreign currency.
According to the SI, companies are liable for a fine of $50 000 or its equivalent in foreign currency for refusing to take payment in local currency at the official exchange rate.
Firms will be fined $5 million for supplying false information to their banks when applying for foreign currency at the RBZ auction.
A $50 000 penalty will also be levied on anyone selling goods at a rate above the official exchange rate and the same fine applies to companies that issue Zimdollar receipts for goods sold in United States dollars.
Bongani Ndlovu