More people illegally smuggling foreign currency will soon be arrested and more financial institutions indicted as the government flings the whip against those who drive and manipulate the black market, despite the fact that Zimbabwe’s foreign currency inflows are more than sufficient to purchase all the necessary imports and services.
Lawmakers and economic analysts attending a pre-budget seminar marking the start of the 2022 national budget cycle urged the government to take decisive action against companies that price commodities at black market rates despite access to foreign exchange of the Reserve Bank of Zimbabwe auction system.
Yesterday, the local currency was sold by merchants for as much as $ 200 to US $ 1, more than double the official auction rate of US $ 1: $ 88.6.
In his remarks, National Assembly attorney Jacob Mudenda said the black market would derail the achievement of government goals captured in National Development Strategy 1 (NDS1).
“The black market premium is worrying, which is now double the official exchange rate of $ 1: $ 88.6.
“Black market premiums are a major driver of inflationary developments in the country. This trend will derail NDS1’s goal of stabilizing the exchange rate and keeping inflation low within the SADC macroeconomic convergence benchmark of 3-7%, ”he said.
He thanked the government for spearheading the fight against illegal foreign currency traffickers.
“Recently there have been some 47 arrests of people involved and others will be arrested and I believe, including some banks. This will help us reduce inflation because as long as we do not reduce the black market, inflation will continue to rise, ”said Adv Mudenda.
The Executive Director of Africa’s Development Strategies, Professor Gift Mugano, said Zimbabwe generates enough foreign exchange to help improve economic fortunes if tapped through formal channels.
Last year, the country recorded inflows of over US $ 6.2 billion and is on track to garner US $ 8 billion this year.
Professor Mugano called on Parliament to exercise control over the use of foreign currency from exports and other official inputs.
We are among the top five to receive foreign currency in Africa, so where is it going? What is happening is people are exchanging money. It has become a commodity because of the difference between the official rate and the parallel market rate, ”he said.
Professor Mugano lamented the increase in the number of people using their skills and expertise to bypass systems.
“If the government does not decisively tackle this corruption and foreign exchange trading, we will make history as a country whose economy will collapse when we have all the positive indicators,” did he declare.
Ms. Shanangurai Takaindisa, vice president of the Zimbabwe Bankers Association, urged the government to keep some of its gold and other minerals in reserve to consolidate the local currency.
Buhera West lawmaker Cde Joseph Chinotimba has called for the arrest of large companies that obtain foreign currency from the auction system but continue to set prices on the basis of parallel market rates.