GOVERNMENT is going to decisively deal with sharks in the financial sector who are profiteering at the expense of the public, President Mnangagwa has said.
In an interview ahead of the country’s 41st Uhuru
celebrations, that will be broadcast on Saturday, the President said Government
knows the people who are trying to manipulate the economy for their selfish
gains.
“There are sharks in the financial sector. We now know who
they are. We are dealing with them,” President Mnangagwa said in a snippet of
the interview that was shared by the Permanent Secretary in the Ministry of
Information, Publicity and Broadcasting Services Mr Nick Mangwana on Twitter.
This year, Independence Day is being be held under the
theme “Together growing our economy for a prosperous, resilient and inclusive
society”.
Since the inception of the Second Republic some foreign
countries have been working around the clock to rouse public anger against
Government through manipulating the markets.
In their sinister agenda, they have been aided by local
players in the economic sector who have recently been trying to worm their way
to the Reserve Bank of Zimbabwe’s (RBZ) weekly Foreign Currency Auction Trading
System.
This follows last year’s move by Government to shut down
murky and clandestine channels which were fuelling the black market and other
illicit financial activities, amid revelations that some foreign nations and
powerful players in the mobile telecommunication sector had been trying to
cause general paralysis in the country through manipulating the market and also
sponsoring nongovernmental organisations, trade unions and the opposition to
lead strikes.
To curb illicit financial flows, Government introduced a
raft of measures that included suspending mobile money transfers except for
receiving payments for goods and services as well as utility bills payments,
while the Zimbabwe Stock Exchange was suspended to allow for investigations
after the Government found impeccable evidence of illicit practices.
Apart from moving in to suspend some mobile money transfer
platforms such as on EcoCash, which curiously held billions of dollars in less
than 501 000 agent and merchant lines, the Government also put in place
measures to protect the public from the illegal activities that had caused
inflation and consequent price increases.
To ameliorate the public living standards, the Government
also rolled out US denominated cushion allowances for civil servants, introduced
cheaper public transport and kept subsidies on basics such as maize meal among
a host of other interventions.
Although prices have stabilised, the economic saboteurs
have now devised new ways to continue profiteering and through illicit dealings
on the black market, as well as targeting the Foreign Currency Trading Systems.
In June last year, Government, basing on impeccable
intelligence, revealed that phone-based mobile money systems of Zimbabwe were
conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately
or inadvertently, in illicit activities that are sabotaging the economy.
The activities included, the illegal externalisation of
foreign currency through transfer mispricing;
Acting as banks outside the purpose for which they were
originally licensed, as non-banking financial institutions. This includes, in
the particular case of EcoCash, holding well in excess of $8 billion
distributed across just over 501 000 agent/merchant lines as at June 10, 2020,
which is not under the scrutiny of the Financial Intelligence Unit;
Fraudulently creating and issuing non-attributable and
non-auditable agent cellphone lines/accounts;
Hiding irreconcilable accounts in suspense accounts which
hold huge credit balances for unjustifiably long periods;
EcoCash, in particular, is acting as the centre pivot of
the galloping black market foreign exchange rate and therefore, fuelling the
incessant price hikes of goods and services that are bedevilling the economy
and causing untold hardship to the people of Zimbabwe. In this regard, it has been conspiring with
big merchants to act as their conduit through which they transfer hundreds of
millions of dollars per day to runners on the street who then buy US dollars on their behalf;
Rampant, often arrogant, non-compliance with directives
issued by the Reserve Bank of Zimbabwe and the Financial Intelligence Unit;
Facilitating illicit trade in notes and coins, at contrived
rates of between 30 percent and 50 percent, thus causing artificial shortages of
the same within the banking system;
Criminally allowing agent lines that were banned by the RBZ
to continue trading illegally;
Using bulk airtime sales at discounted prices which are
cross rated to phantom USD exchange rates, which further distort the Zimbabwe
market and deliberately mop up US dollars from the black market, thus forcing
up the rate of exchange in a manner that has hitherto been difficult to explain
for the monetary authorities;
Engaging in rampant unchecked tax evasion;
Failure to report suspicious transactions or to take action
against them;
Creation of illegal transient and permanent money through
airtime loans, unaccounted wallet-to-bank and bank-to-wallet transactions and
other malpractices;
Maintaining unauditable mobile phone lines or accounts
which are being used by criminal syndicates, in connivance with insiders, to
steal money from subscribers through such fraudulent practices as teeming and
lading;
Acting as conduits for the circulation of counterfeit USD
notes; and
Facilitating criminal activities through the
non-enforcement of KYC requirements; and all the country’s three mobile money
platforms, namely: EcoCash, OneMoney, Telecash and MyCash Mobile Money
platforms were found complicit in the illicit activities in varying degrees.
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