Illegal foreign currency dealers disappeared from the streets yesterday and immediately went underground following the promulgation of harsh regulations that criminalise cash vending without permission from the Reserve Bank of Zimbabwe (RBZ).
A survey by the Daily News showed yesterday that illegal foreign exchange trading points in the major cities of Harare and Bulawayo were deserted as money changers retreated underground for fear of arrests.
This was after plain-clothed police officers launched a blitz against the money changers in areas that had become a haven for illegal money changers.
In Harare, there was no sign of any foreign currency trading at the popular Eastgate Mall — along Sam Nujoma Street — Fourth Street bus terminus; Ximex area and Copacabana.
While the money changers also disappeared from their favourite spots in the second largest city of Bulawayo, including from the popular Usiphatheleni — also known as the World Bank — illicit dealing is still taking place in hidden corners.
The usually congested street corners of Bulawayo were conspicuously empty, as the money changers have devised new ways of trading in currencies that are in high demand.
Most of them are now leaving their money in cars to evade being detected by police unlike in the past when they would publicly parade the notes for all to see.
On Thursday, government gazetted regulations that criminalise cash vending without permission from the exchange control.
Through the regulations, police have been empowered to arrest illegal money changers and seize whatever currency they will be trading in.
Another law is in the offing, according to Finance minister Patrick Chinamasa that will send unlicensed foreign currency dealers to jail for 10 years.
“Trading in currency without a licence is an offence. The regulations make it clear that anyone who deals in currency as commodity either at a premium or at a discount commits an offence,” Chinamasa told parliamentarians on Thursday.
The new law is expected to be rammed through the bicameral Parliament, where President Robert Mugabe enjoys a commanding two-thirds majority in both houses.
For now, the authorities can, however, not claim victory as yet as illegal foreign currency dealers are still operating discreetly in both Harare and Bulawayo.
Legal experts welcomed the move, but said there was need to address the root cause of crisis which has led to the sprouting of money changers and the availability of notes in the street, while it’s scarce in banks.
Harare lawyer Emmanuel Mukweva told the Daily News yesterday that even though the sentence might be deterrent, it is not the panacea to the money problems the country is facing, as the solution is to deal with the root cause.
“Generally, I think the solution is to address the economic situation that the country is facing and to get rid of the parallel market. The Reserve Bank of Zimbabwe must do its mandatory duty to deal with the crisis. Even if they arrest the money changers, it will not change the situation at all.
“The current situation involves bigger players, because the notes that we see on the streets are crispy, meaning the money is being taken from a certain source. They get the money from the bank, someone is supplying that money, there is someone doing all these things. The one supplying the notes is the biggest problem and that primary player must be held accountable,” Mukweva said.
Another Harare lawyer Dumisani Mthombeni commended the move to jail the money changers although he said this came a little too late.
“A welcome move albeit belated. Laws alone will not achieve much without implementation and the right attitude from us all,” Mthombeni wrote on the micro-blogging site Twitter account.
He further told the Daily News in a telephone interview that the laws should be used uniformly to deal with the money changers.
“Laws are only effective as we want them to be. We can have a law in place but the law is useless on its own unless we implement it. We hope there will be uniformity in the application of the law and law enforcement agents will not use the laws corruptly for self-enrichment through bribery,” Mthombeni said.
Zimbabwe is currently suffering a cash crisis as banks have run dry of bank notes.
Nonetheless, wads of cash are being channelled into the informal sector, where the exchange rate for the bond note introduced in November last year is running wild.
While the bond notes were meant to trade at 1:1 viz-a-viz the United State dollar, rates have gone up by as much as 50 percent if not more.
The market has also experienced a three-tier pricing system with each form of transaction having its own price.
Heavy premiums apply to electronic transfers effected through the Real Time Gross Settlement system. daily news