In its 2024
Financial Stability Report, the RBZ said new patterns of money laundering, tax
evasion, and smuggling had emerged in under-regulated sectors, where cash
transactions dominate and anti-money laundering systems are weak.
“Real estate,
car dealers and precious stone or precious metal dealers are the sectors that
are most susceptible to money laundering,” the RBZ said.
“This is partly
due to the widespread use of cash transactions and partly due to weak
anti-money laundering controls in these sectors.”
While public
discourse on IFFs in Zimbabwe has largely centred on gold and diamonds — with
the Centre for Natural Resource Governance estimating up to US$15 billion is
lost annually — the central bank said these new revelations paint a broader
picture of financial crimes bleeding the economy.
“The high
informalisation of the Zimbabwe economy and the widespread use of US dollar
cash also present challenges in effective monitoring and combat of money
laundering,” the RBZ added.
Although it did
not quantify the exact value of illicit flows in real estate and the auto
trade, there have been concerns that authorities were taking too long to tackle
the problem.
The country’s
third National Risk Assessment, done using a World Bank tool, rated Zimbabwe’s
overall money laundering risk as medium, driven by a medium-high vulnerability
rating.
Lawyers first
raised red flags last year, revealing to the Zimbabwe Independent that they
were processing millions in untraceable US dollar transactions for property
acquisitions — often for wealthy Zimbabweans seeking to offload cash quickly
into high-value assets.
The RBZ noted
that major financial crimes behind IFFs included “tax evasion, corruption,
fraud, drug trafficking, smuggling and illegal dealing in precious stones and
precious metals”.
This came as
the Zimbabwe Revenue Authority (Zimra) intensified a sweeping anti-smuggling
blitz, impounding US$10,6 million worth of contraband during the first half of
2024, aided by cutting-edge surveillance technologies, including drones.
Zimra marketing
and corporate affairs executive, Gladman Njanji, said the authority had
intercepted goods such as alcohol, groceries, electrical appliances,meat
products, and clothing at various border points, including Beitbridge.
“To date, a
total of ZiG 129,673,959.88 (US$4,822,386) and US$614,851.30 has been recovered
in duties from goods that have since been released,” Njanji said. “Duties
payable on goods still under detention currently stand at ZiG 89,203,789.49
(US$3,317,359.22) and US$ 1,8 million”
Zimra recorded
1 029 smuggling-related cases since launching the blitz last year, comprising
384 seizures and 645 detentions.
Still, the
scale of the crisis remains daunting.
The Zimbabwe
National Chamber of Commerce (ZNCC) warned recently that up to US$2,2 billion
is lost every year through smuggling, wiping out an estimated 20 000 jobs as
struggling industries collapse under a flood of cheap, untaxed imports.
"The
porous nature of Zimbabwe's borders facilitates the smuggling of goods, which
undermines the formal economy and leads to widespread illegality and
informality," ZNCC said in a paper submitted to Treasury.
The report
noted that illicit imports were triggering job market carnage and bankruptcies
in key sectors, including retail and textiles, and accelerating
deindustrialisation.
“Transit fraud
makes the playing field uneven and drives out local manufacturers and
legitimate players in the industry to the ground,” ZNCC warned.
Authorities say
smugglers now exploit informal cross-border trade networks using buses and
trucks to move large consignments, while also using loopholes in the
travellers’ rebate system that allows duty-free imports below US$200.
Zimra is now
requiring small businesses to register and adopt point-of-sale systems,
threatening closures for non-compliance. The crackdown forms part of a broader
government initiative to formalise the informal sector and stabilise domestic
industry. Zimbabwe Independent
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