The Reserve Bank of Zimbabwe is investigating several top companies for allegedly externalising millions of United States dollars, contributing to present cash shortages.
Those fingered in illicit financial flows will be handed over to the police. And more firms could be outed in “Panama Papers” scheduled for release in coming days.
Platinum giant Zimplats was the first to be fingered in the damning whistleblower papers that recounted how the company’s top management were paid millions off shore and deprived the State of revenue.
The RBZ is now on Zimplats’ trail and has turned its forensic lenses on other companies that could soon be exposed this week.
It is understood monetary authorities have already compiled a list of suspects and will soon wrap up investigations and will give police the names of suspects who are shipping out millions of US dolllars even as ordinary people struggle to withdraw US$200 daily from banks.
Reserve Bank Governor Dr John Mangudya told The Sunday Mail that at least US$50 million had been externalised via wire transfers since January 2016. Cash transported out of Zimbabwe physically is still to be quantified.
The RBZ imported US$15 million last Friday to offset cash shortages.
Dr Mangudya said, “In terms of leakages of foreign exchange from the country through externalisation, it is something that the Central Bank is continuously addressing through monitoring of transfers by the banking public. We are saddened by such activities which are counterproductive and result in the abuse of our hard-earned foreign exchange. Externalisation is worrisome worldwide and needs to be closely monitored.
“And yes, investigations are taking place. It has been very difficult to objectively quantify the levels of externalisation, though, as most of it is externalised as cash by some unscrupulous businesspeople who sell their trinkets and other non-productive low local content items in Zimbabwe. Wire transfers through similar transactions amounted to US$50 million for the first four months in 2016.”
On bond notes, Dr Mangudya said: “Addressing capital flight is one of the major motivations for us to utilise bond notes as opposed to injecting the US$200 million (provided by the Africa Export-Import Bank) directly into the market. That money could disappear into thin air!
“The objective of the notes is to fund the 5 percent export incentive scheme in a sustainable manner that militates against capital flight. This means without the bond notes, there would be no export incentive facility.”
He added, “We want to create a revolution for the use of plastic money in Zimbabwe to ensure that we do not put too much unnecessary pressure on the demand for cash.
“This is why we have announced that all retailers, wholesalers, businesses, local authorities, utilities, schools, universities, colleges, service stations and the informal sector are required to install point of sale machines. Use of plastic money also assists in the development and growth of the economy as this increases the multiplier effect of money.
“Money tends to circulate much more when using plastic money and wire transfers than in a cash economy. Throughout the world, the best practice shows that not all deposits are covered by cash. On an average scale, globally, 10 percent of deposits are cash while the rest is done through plastic money.”
Over the weeks, Zimbabwe have been experiencing cash shortages.
The shortages have been attributed to illicit financial flows and the dearth of a savings culture that has seen depositors keep cash outside the banking system.
Other countries and companies in Southern Africa have mopped up US dollars from Zimbabwe since adoption of the multi-currency system in 2009.
The RBZ will soon introduce bond notes and actively advocate the use of other currencies like the euro and South African rand to resolve the liquidity problem.
As of last week, 40 percent of all new US dollar exchange receipts of goods and services will be converted to the RBZ at the official exchange rate to the rand and 10 percent to the Euro.
Minimum cash withdrawal limits have been pegged between US$1 000 and US$20 000.