Zimbabwe urged to name and shame companies abusing the foreign currency facility as fines do not work


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THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA): Thank you very much Mr. Speaker Sir, for such a pertinent question which was asked by Hon. Nyabani.  Indeed, it is very true that we are receiving reports regarding wholesalers and such business entities which come to the auction.  They get money to buy their goods. Such business entities, upon receiving money from the RBZ, then sell their goods in US dollars and not taking local currency.  Working together with the Financial Intelligence Unit, our Ministry has been seized with the issue. I will give a report of what we have done so far.  For those who violated the auction protocols, who get money from the auction and sell their products in US dollars, for those who abused the system we have managed to penalise 163 and those who are under investigations by the FIU, we have 284 business entities that are being investigated.

I would like to inform the House that we also do an environmental scanning. As of Friday last week, we investigated big shops, pharmacies and some retailers. Out of the 28, those who were comply ing with the exchange rate were only 11, which means that we have a lot of violations. The FIU on its own does not have the capacity to cover Zimbabwe as a whole. At the moment, we want to work with the National Economic Inspectorate and different law enforcement agents so that we cover the whole country.

In the past, we were getting reports that the auction rate is not doing the price recovery as it is but now that there is the willing buyer, and willing seller basis, there is no reason for us to go around taking note of what is happening in the market. What is left is that we start enforcing laws through the different arms. We are penalising offenders and the law is very clear that anyone who gets money from the auction should charge in local currency. If they want to use the USD, they need to use the auction exchange rate. I thank you.

HON. NYABANI: Thank you Mr. Speaker Sir. In the past we had the Consumer Council of Zimbabwe which was responsible for confirming that retailers were adhering to the laws. The question is – is this still happening that consumers are being protected? So we need a Ministerial Statement from the Ministry so that we know whether consumers are protected. Thank you.

HON. CHIDUWA: Thank you Hon. Speaker Sir. Government policy is there. The Consumer Protection Act, Chapter 14 is there to protect the consumer and stipulates that consumers should be protected by the law. The monitoring which is done by the Consumer Council of Zimbabwe can be done but CCZ does not have arresting powers. They work with the responsible authorities through the Financial Intelligence Unit and the different intelligence and security agencies but we work together with CCZ. I thank you.

HON. BITI: Thank you Hon. Speaker Sir. My supplementary question to the esteemed Hon. Minister is that the auction is still a source of arbitrage. The black market rate is now between ZWD650 and ZW$D700 but the auction is around ZWD350. Why not just remove the auction so that we do not have arbitrage and the ZWD will find its own resting place without the arbitrage of the auction. Secondly Mr. Speaker Sir…

THE HON. SPEAKER: You cannot ask two questions.

HON. BITI: It is just buttressing Hon. Speaker Sir.

THE HON. SPEAKER: No, you asked a very good supplementary question.

HON. BITI: Okay, thank you Sir. God Bless you.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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