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RBZ names, shames illegal forex dealers

The Reserve Bank of Zimbabwe yesterday banned 30 black-market currency dealers from operating any bank or mobile money accounts for the next two years and wants them banned from even using a cellphone line.

The names and other details of the 30 have also been handed over to law enforcement agencies for possible criminal prosecution and the Reserve Bank is seeking public help to identify more such people.

No details except their names, mobile phone numbers and, in all but one case, the national ID numbers of the 30 were published.

Hundreds of illegal dealers throng selected street corners in city centres and suburban shopping centres offering to buy US dollars or South African rands for cash or transfers, and many offering to sell foreign currency in small amounts.

These street dealings are normally for very small amounts, within the mobile money $5 000 limit, and it is known that there are dealers who handle far larger sums and who aggregate the collections of the small street dealers.

“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,” Governor Dr John Mangudya said in a statement yesterday.

He said the FIU had also requested the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) to bar the 30 from operating cellphone lines and indicated that the FIU, in collaboration with law enforcement agencies, will continue to monitor 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 black-market rate was not due to weak fundamentals, but as a result of sentiment by some individuals, in effect that the widening rate mismatch is due to people believing it should be widening, a self-fulfilling prophecy.

Economists agree about the danger of this growing disparity seeing it as a destabilising effect on formal businesses and gains of stability thus achieved so far.

Economist and member of the Reserve Bank of Zimbabwe Monetary Policy Committee Mr Persistence Gwanyanya said the move by the central bank simply 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 which 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.

Mr Gwanyanya noted that the country’s foreign currency management system is structurally weak; hence the RBZ ignoring such activities will drive black-market activity.

“These interventions will send a strong message in the market to would-be abusers,” he said.

“While the list is not exhaustive, it is a beginning,” he noted.

The 30, with their ID numbers, were named as: Rangarirai Guzha 632550731R45, Lloyd Mbonga 38116287W38, Rodrick Njiva 63942104L22, Peter Idi Kubare 632591926T50, Ernest Maferefa 38056617M38, Munesu Mutsenga 632309867H85, Langford Farai Munyati 592003269N07, Bairon Mawoyo 632246322M50, Edwell Mapondera 632399754L18, Shingirayi Shelton Kuzamba 631235592S71, Nixon Murwira 47171679N47, Nickson Hwai 59033874D18, Kudakwashe Hove 54105536D03, Washington Kativu 43188953N48, Lawrence Kudzaishe Chikanga 632046154N86, Pariet Kadembo 59153509R47, Wellington Hiya 59189755P25, Mehlule Qedisisa Sibanda 08928249S29, Fadzayi Mitetwa 34107926G34, Show Bobo 15106958F15, Admire Sithole 580111668f67, Terence Mwadiwa 63233901N13, Kudakwashe Mkwanila 631553386W63, Jephiter Nzvuwu 04176840S04, Rangarirai Sosono 05088510N45, Winston Guzha 632550731R45, Evans Mutsakanyi 150146420W15, Wisdom Chitava 432006031X48, Takudzwa Mapeka 631520898H18, and Farai Celestino Gwezere.

Recently, Dr Mangudya warned all businesses receiving support from the foreign exchange auction trading system against pegging their prices using the black-market exchange rate, saying such practices destabilise the economy.

Mr Gwanyanya said the central bank should also look into the activities of the fuel sector, which has almost fully dollarised using what are termed free funds, despite some companies accessing foreign currency from the auction system.

Under the rules fuel imports paid for with the free funds, basically foreign currency the service stations and fuel companies get from their customers, can be charged in foreign currency but fuel imported with currency bought at the auction must be sold for local currency.

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 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 by the imposition of civil penalties, which since they are not generated by a criminal conviction need a lower level of proof, that of the balance of probabilities.

An internal system within the Reserve Bank can adjudicate the disputes and impose the penalties, without the courts being involved.

SI 127 of 2021 imposes such civil penalties 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 civil penalty 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 liable to a civil penalty of $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 penalty applies to companies that issue Zimdollar receipts for goods sold in United States dollars.

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