The Zimbabwean government’s battle against the illegal foreign currency trade has intensified, with a fresh wave of arrests sweeping across the country. This latest blitz, a joint operation by the Zimbabwe Republic Police (ZRP) and the Reserve Bank of Zimbabwe’s (RBZ) Financial Intelligence Unit (FIU), has sent ripples through the country’s financial landscape, raising questions about the effectiveness of the ongoing crackdown.
This week, scores of money changers were apprehended, with many still being interrogated and vetted. Their fate hangs in the balance, pending court appearances.
“This is an ongoing joint operation being conducted by police and the RBZ’s Financial Intelligence Unit,” confirmed Commissioner Paul Nyathi, the national police spokesperson. “People should engage in lawful transactions, and we are targeting those who are illegally trading in foreign currency and businesspeople transacting using exchange rates which are above the official rate.”
The crackdown extends beyond the traditional street-corner money changers. Authorities are also targeting supermarkets, pharmacies, and small businesses suspected of engaging in illicit currency transactions, often using exorbitant rates.
“We also have some supermarkets, pharmacies and small businesses which are also using exorbitant rates when transacting,” Commissioner Nyathi stated. “Certainly, action will be taken against all those involved in such activities or anyone using social media to illegally trade in foreign currency.”
The police have urged the public to be vigilant and report any suspicious activity to the National Complaints Desk, either by calling (0242) 703631 or via WhatsApp on 0712 800 197.
This latest crackdown comes on the heels of a previous operation that saw the arrest of 224 illegal money changers and the freezing of 90 bank accounts by May. The FIU also levied fines on over 40 individuals found in violation of the Exchange Control Act.
The renewed focus on curbing illegal forex trading stems from the government’s commitment to stabilizing the Zimbabwean dollar and bolstering the newly introduced Zimbabwe Gold (ZiG) currency, which debuted on April 5th.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has repeatedly emphasized the government’s resolve to address the activities of those undermining the new currency.
“This action has been taken in pursuit of Government’s continued efforts to improve economic stability and restore confidence in the financial system and provide a conducive business environment,” Professor Ncube declared, highlighting the government’s commitment to a stable and transparent financial system.
The government’s efforts extend beyond law enforcement. On Wednesday, 51 contractors were blacklisted for their alleged involvement in diverting payments received for supplying goods and services to the illegal foreign currency parallel market. This blacklisting effectively bars these companies from participating in government tenders and contracts, a significant blow to their business operations.
The government’s actions have been met with mixed reactions. While some applaud the government’s efforts to combat the illegal forex trade and its detrimental impact on the economy, others express concerns about the potential for overreach and the possibility of innocent individuals being caught in the crossfire.
The government’s commitment to tackling the illegal forex trade is undeniable. However, the effectiveness of these measures remains to be seen. The challenge lies in striking a balance between addressing the problem and ensuring that the measures implemented do not stifle legitimate businesses and economic activity.
