PRESIDENT Emmerson Mnangagwa’s amnesty for illegal externalisation of
money has shored up Zimbabwe’s foreign currency reserves — and has also
exposed the impunity with which companies and individuals spirited away
hard cash in recent years.
On March 19 this year, President Mnangagwa made public a list of 1
844 firms and people who externalised an estimated $1 billion, following
the expiry of a three-month amnesty that ran from December 1, 2017.
Over $590 million has so far been recovered, and indications are that
since March 19 this year, 55 people and companies that had taken more
than $90 million out of the country — either as unaccounted for export
receipts ($87,9 million) or undelivered imports ($4,8 million) — had
approached the Reserve Bank of Zimbabwe to return to good legal
standing. All formal cross-border banking transactions are captured in a
database maintained by the RBZ, giving monetary authorities up to the
minute information on any money that leaves Zimbabwe. It is this
database that was used to compile the list and has helped the country
recover close to $600 million in just three months. However, some have
remained obstinate. One of them, information obtained by The Sunday Mail shows, is a mining company that handed over a total of $25
million in hard currency to its majority shareholder at Beitbridge
Border Post.
The businessman has refused to heed the amnesty and it is understood
that law enforcement agencies are now handling that matter. Another case
is that of a prominent individual who was corruptly paid more than $8
million for “facilitating” an agri-equipment deal.
That individual is said to have now approached the RBZ to try and
clear his name but his case has been complicated by the doubly illegal
nature of the matter: the bribe and the externalisation. The Sunday Mail understands that law enforcement agents in Zimbabwe, South Africa
and Portugal are investigating the case. A well-placed source at the
Finance Ministry said: “The sheer impunity with which people took money
outside Zimbabwe says a lot about the previous regime. There simply was
no appetite for law and order.
“There are many such cases and that is why we are getting a lot of
noise in some sections of the media about why President ED is naming and
shaming.
“They are rushing to the media because they know they have been
caught on the wrong side. They should approach the Reserve Bank to clean
their dirty hands. There is still scope to address these matters
without having to take each other to court.”
RBZ Governor Dr John Mangudya last week said he would not comment on
individual cases, but pointed out that enforcement of laws and
regulations was encouraging investors to come to Zimbabwe.
“Investors want to operate in a legal, predictable environment and that is what the new dispensation has been creating. In 2014/15, the RBZ gave an amnesty to externalisers and tax dodgers, but the environment gave people confidence to do as they pleased.
“Now monetary authorities have been given teeth by the President and we have companies coming forward to state their cases, bring back money, and come clean.
“Exchange control is standard practice across the world, and everything we are doing here is provided for by the enabling Act and supporting statutory regulations.
“For instance, in China everyone knows that externalisation will land you in jail for a long, long time. But some of the Chinese companies that were operating here had joined the bandwagon of illegality.
“I am pleased to tell you that a big percentage percent of the Chinese companies on that list have approached us to comply with the law since we published that list.”
Dr Mangudya encouraged externalisers to approach their banks or the RBZ directly to clear their names.
“That list that was published was very accurate and we stand by it. The concerned companies know it and that’s why they are approaching the (central) bank.
“Our end objective is compliance, full accountability and transparency. There is no use for us to go looking for money from Afreximbank if people continue externalising it. We have to account for that money and every company in Zimbabwe knows that these are international standards that are observed all over the world.
“Investors want to operate in a country where people comply with the law and they are very happy with what the President has done,” he said.
Authorities are crafting a Money Laundering and Proceeds of Crime (Amendment) Bill to deal with illicit financial flows. Publication of that list and other interventions, Dr Mangudya said, had shored up Zimbabwe’s foreign currency reserves.
“We have noticed that there is a general increase in foreign reserves in the country compared to last year. There has also been an increase in cash deposits and I think this can be attributed to public confidence levels which have also increased.
“According to our end-of-day positions, which is the difference between deposits and cash withdrawals of the day, there has been an increase of between 20 and 25 percent in our foreign currency reserves. This was between end of November last year and March 2018.
“This has greatly improved the cash situation in the country as long queues are now being experienced during pay days. One of the reasons for the increase are the policies that we have introduced. The other issue is that consumers have embraced the use of plastic money and mobile money transfers. There is a need for the country to continue producing and lowering imports.”
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