Zimbabwe says it needs bond notes because “we are feeding looters”

Mangudya said at the core of the crisis were cash leakages by foreign-owned firms.

“They are not coming here because they love us,” he said.  “They are coming to grab and go.”

The bond notes would only circulate locally and can only work in a dollarised environment, ensuring no leakages, he said.

Mangudya claimed he had received a report that a foreign firm had transported $20 million in bags through borders.

Up to $13 billion is reportedly unaccounted for in the diamond mining sector, he said.

“There is much externalisation in this economy,” he said. “These unscrupulous businesspeople are taking money. We are feeding the looters. You take money from a poor country to a rich country.”

Mangudya said due to international regulations against money laundering, banks were now facing hurdles when importing United States dollars.

He said banks, which apply a principle called due Customer due diligence (CDD) to their customers, were also subject to the same process when they transact on the international stage.

“There are also limitations in importing cash,” Mangudya told the over 200 executives and analysts.

“They are now saying ‘what has happened to that country?’ You cannot just wake up and say ‘I want to import $100 million, Zimbabwe needs US$300 million’. There is something called CDD,” he said.

This week, RBZ said it had imported $15 million to ease the cash crisis, although Mangudya said shortages could hit the markets again today as pensioners start receiving their pay outs.

His comments were supported by the Bankers Association of Zimbabwe (BAZ), which said the more cash banks imported, the more concerns were raised by their corresponding foreign financial institutions from where they imported cash.

“Because of money laundering regulations, the more cash we import, the more concerns are raised,” said BAZ president Charity Jinya. “This affects our ability to deal with international banks.”-The Source

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