malvernmugadzikwa
Business Writer
The gazzeting of regulations limiting amount of cash in US dollars an individual can take out of the country is one of the many ways Government can employ to block the export of cash, an illicit practice that has been for long bleeding the economy.
Government gazetted the Exchange Control (General) (Amendment) Order, 2024, which caps the maximum amount of cash that can be exported at US$ 2000 from US$10 000 and the restrictions apply to both Zimbabwean residents and non-residents leaving the country.
Before this regulation was promulgated, cash rich individuals would use family members and friends to travel abroad with huge amounts of cash for personal use or as a means to siphon cash out of the country.
The new rules, however, also extend to the departure or transit lounges of airports and other ports of entry or exit, where individuals are now limited to carrying the same amount of cash without prior authorisation.
The Government has justified the measures as necessary to protect the country’s foreign exchange reserves and maintain macroeconomic stability, a development well accepted by positive thinking Zimbabwean businesspeople.
Reads the regulation: “The maximum amount of Zimbabwean currency notes and coins that may be taken out of Zimbabwe on the person or in the baggage of a person leaving Zimbabwe shall be an amount equivalent to US$2 000 (and) the maximum amount of foreign currency that may be taken out of Zimbabwe on the person or in the baggage of a person who is leaving Zimbabwe shall be a total of US$2 000.”
However, some critics argue that the restrictions could stifle legitimate business activities and hinder the movement of funds for personal or educational purposes.
“Although well-intentioned, the implementation of these cash carry limits could unintentionally hinder the flow of funds necessary for personal, educational and business activities, potentially limiting economic growth and development,” Harare based economist Tobias Musara said.
The Bankers Association of Zimbabwe (BAZ) expressed concerns that the recent reduction in cash carry limits could significantly disrupt informal import trade. The sector plays a vital role in Zimbabwe’s economy, particularly in supplying essential goods and services.
The BAZ warned that a potential shortage of basic commodities, job losses, or reduced income for those involved in informal retail, transportation and related sectors could follow. The consequences would amplify economic hardship in a country already grappling with limited formal employment opportunities.
Zimbabwe imports a significant portion of its products, particularly from South Africa, and many of these transactions are conducted in cash.
Bongani Ndlovu