THE Reserve Bank of Zimbabwe (RBZ)’s decision to tighten
regulations on withdrawals of foreign currency by Zimbabweans who earn their
salaries in foreign currency faces litigation, while analysts warned the move
would result in people spiriting away their money to offshore accounts.
A leaked FBC Bank instruction circular at the weekend
indicated that the RBZ will, from today, be demanding written requests from
people who earn in US dollars for
them to withdraw their money while banks will also be
ordered to convert all unutilised bank balances not withdrawn in one’s nostro
foreign currency account within 30 days from day of deposit to local currency
using prevailing interbank rates.
RBZ governor John Mangudya at the weekend confirmed the new
rules, saying the document would deal with funds from exporting companies.
Former Finance minister Tendai Biti has, however, blasted
the move, describing it as illegal and in contravention of section 71 of the
Constitution.
“Government and the RBZ cannot be experts in doing lawless
things because all these are desperate actions by a desperate, despicable
regime. You cannot have a government that generates the suffering of its people
on a day to day basis,” Biti said.
“Besides, this issue is unlawful and unconstitutional
because a salary is protected by section 71 of the Constitution and no one has
a right to appropriate anyone’s salary as this will simply force companies and
employees to relocate their accounts offshore to countries like Botswana,
Zambia and South Africa.”
Section 71 of the Constitution speaks on property rights,
which includes pensions, annuity, gratuity, and similar allowances, and it
states that any person anywhere in Zimbabwe has a right to acquire, hold,
occupy, use, transfer, hypothecate, lease or dispose of all forms of property,
either individually or in association with others.
Biti added: “This is foolishness being done by government
which is desperate for foreign currency and they are now trying to grab every
dollar of forex. We are generating about US$5 billion from our exports and so
the issue is that the money is being spent by thugs and crooks.
“The issue is how government is using the foreign currency.
Actually, forex must be credited to the Consolidated Revenue Fund and
Parliament must be the one to distribute foreign currency through the
Appropriation Account.”
Economist Kipson Gundani weighed in, saying: “Clearly, we
have got a monetary regime which is transitioning from a dollarised environment
into a mono-currency environment of the Zimdollar and what the authorities are
then trying to do is to avoid a big-bang approach, where you overhaul things
and overnight there is an effect.
“They are now trying to give precedence to bonafide United
States dollar earners, but it distorts the market. If one is to access the US
dollar and they access it through the banks, then they will be tempted to open
off-shore accounts. These are some of the unintended effects that will happen
if at all this is operationalised.”
Another economist, who preferred anonymity, said if the RBZ
implemented this, then it would be a drastic measure with serious consequences.
“If it is real, then we can brace up for a fight because it
will affect a lot of businesses and people. The effect is that foreign currency
will be externalised and the RBZ will whip away the little confidence and trust
remaining,” the economist opined.
The economist also described the RBZ move as synonymous to
what happened in 2008 during former RBZ governor Gideon Gono’s era when he
raided foreign currency accounts belonging to private businesses and foreign
aid organisations to help sustain troubled government ministries.
In the year that followed, many then opted to stash their
forex abroad and in 2017, an adviser to government on the ease-of-doing
business, Ashok Chakravarti, called for an investigation into the
externalisation of funds, as it had emerged that US$5 billion could have been
siphoned out of the country since dollarisation in 2009.
The money was said to have been taken out and deposited
into offshore accounts, thus depriving the country of the much-needed foreign
currency.This subsequently plunged the country into serious financial crisis.
Newsday
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