Why are Zimbabweans with free funds looking for Zimdollars when they need US dollars to import, Minister asks?

The publication of names of those accessing forex from the auction, this we have been doing but what I think is needed is the recommendation which I also got here yesterday that we should name and shame those who are abusing.  Those who are getting we have been publishing, but we should also name and shame those who are involved in illicit activities after obtaining forex from the auction market.

Then the question from Hon. Mushoriwa…

THE HON. SPEAKER:  Just hold on Hon. Minister.  Hon. Sikhala.

HON. SIKHALA:  Yes, Hon. Speaker Sir.

THE HON. SPEAKER:  When you respond, you must be on your feet Hon. Sikhala, you have to be on your feet.  You are well dressed for the court process. Why not put on your tie?

HON. SIKHALA: I left it in the office and I kindly seek your indulgence for today only but I am wearing a bore tie.

THE HON. SPEAKER: That is a bore tie for the court.  I will indulge you for today.

HON. CHIDUWA: The question from Hon. Mushoriwa was that why would the Government want to punish those with free funds and also that were enough consultations done.   Hon. Speaker, what we are dealing with here is the operation of an underground economy which has got the potential to totally destabilise the Zimbabwean economy. The use of free funds; it is something that we allowed as financial authorities and we did not sanction that free funds should be used for illegal activities.  If you checked, there is no way we can have a country where there are no parallel markets.

However, it is the degree of premium that gets policy makers to be worried.  I remember making a presentation here where I said, ‘what is critical for Zimbabwe is stability’. There was stability in the parallel market and there was stability in the official markets.  As long as there is stability, the economy is good to go but the moment we realise that there was a movement from 1:20 in the parallel market to 1:40.  Surely that movement was not as a result of economic fundamentals.  Therefore, there was need for us to ensure that there is stability in the exchange rate market.

The parallel market is operating because people are looking for USD.  Why would somebody with USD now want to go to the market to look for ZWL?  If we are saying they want the USD to use them for importation, if they have got free funds, they. can use them directly for importation.  However, the moment the free funds are now going to the parallel market and you see that the rates that are being charged are far way from what we expected in terms of international best practices…

THE HON. SPEAKER: Hon. Minister, address the Chair and not the questioner.

 HON. CHIDUWA: In terms of consultations, consultations were done but they were not as extensive as what we would have wanted.  I have mentioned in the Ministerial Statement that the SI was done under Presidential powers and this is going to expire after 181 days and after that, this is where we are going to bring the two acts for amendments to this august House.  I am sure from there we should be able to consult from our constituencies.

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