Some businesses were able to minimise losses by up to $5.5 million since they began using the foreign exchange system. However, other business are said to have been abusing this system. Such businesses have been exposed by the RBZ and will be facing the necessary penalties.

View the official RBZ statement pertaining to this matter below:

When it began,the foreign exchange system was criticised heavily. Some of the criticism came following the release of the companies that were benefiting from it. Alex Magaisa was one of the people to have criticised the list.

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The then established bank withdrawal limiting was placed at $2000. This limit was therefore unsatisfactory to a number of citizens who wanted the weekly limit to be reviewed. Unfortunately this was declined.

In senate on Thursday, Mthuli Ncube, Finance Minster, shared the following sentiments:

“The issue about regulating access to cash was triggered by the abuse that we had seen taking place from the use of the mobile banking platform in terms of electronic money.

We realize that it is necessary to restrict the cash withdrawals, the amounts that can be used at any point in time and be transferred at any point in time.

This is necessary for us to keep those restrictions in place as a general policy. If we loosen up on that, it will cause a lot of difficulties and basically, we will go back to where we were before, where individuals will access larger amounts of cash and then want to trade in the parallel market and just make our currency more unstable”

This decision is said to have been made as a way for government to keep the country’s currency stable.

Mthuli Ncube pointed out that the currency is currently trading at about $84 to 1US$. Some compare this to the $1 to US$1 rate that once was, not mentioning the drastic fluctuations in between, and point out that the currency was never stable to begin with. This point appears to highlight that the governments efforts to stabilize the currency seem futile.

Nonetheless, RBZ Governor, John Mangudya, shared his sentiments on the issue of not increasing bank withdrawal limits. He said that the country’s efforts in stabilizing financial system require team effort by all Zimbabweans and a willingness to comply with given mandates.

What about authorized dealers?

He said the following:

“The Bank’s Exchange Control Inspectorate and the Financial Intelligence Unit (FIU) have enhanced their monitoring and surveillance on the utilisation of foreign exchange in the market to foster market discipline.

Banks and mobile banking institutions are obliged to ensure that the Know Your Customer (KYC) and Customer Due Diligence (CDD) principles are complied with at all times.

In essence, FIU will continue to ensure that authorized dealers or banks and foreign exchange auction system participants comply with auction rules and regulations to stop the abuse of such financial systems.

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Alex T Magaisa, ‘former adviser of  a PM OF Zimbabwe and to the constitution making team,’ shared the following remarks:

“The Reserve Bank Of Zimbabwe announced a list of what it called the top 100 beneficiaries of the Forex Auction System for the 1st 8 months. A good move you would think, except it’s incomplete, vague and misleading. Much remains obscure in the bottom part of the list.

2. The so-called top 100 beneficiaries only account for 45% of the total forex that was sold. The bulk of the forex (55%) went to “other companies and individuals”. Who the beneficiaries in this shady category are is as clear as mud. It raises questions.

3. It is disingenuous and deceptive for the central bank to purport to be transparent when its list accounts for a small fraction of the bigger picture. It’s like inviting guests to a dinner party and announcing that the party is over after the starters!

4. If anything, the RBZ list raises more questions than there were before it was published. Because now we are all curious to know who the “other companies & individuals” who got the bulk of the money are. Who are they & how much of this larger share of the cake did they get?

5. They will probably say the remainder are outside the top 100. This is difficult to believe. But even if that is the case, may they publish the full list in the interests of full disclosure & transparency. They started it. They might as well finish it & remove all doubt.”

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