21 September 2017

Zimbabwe: Chinamasa Grilled Over Cash 'Black Market'

Photo: The Financial Gazette
Bond coins.

Finance and Economic Development Minister Patrick Chinamasa was yesterday taken to task by legislators over Government's inaction on the illegal sale of scarce cash on the black market.

Members of Parliament across the political divide asked the minister why there was no evident effort to prosecute cash dealers whom they claimed acted in cahoots with financial institutions and influential individuals.

The questions were raised in the National Assembly during a question-and-answer session. Shamva South Member of Parliament Cde Joseph Mapiki (Zanu-PF) was the first to ask why cash dealers were not being jailed and fingered members of the Indian and Chinese communities for selling cash at a premium.

Cde Mapiki said EcoCash dealers were also levying charges on desperate customers. Minister Chinamasa said there was no law providing for the arrest and imprisonment of such individuals, but that the Reserve Bank of Zimbabwe was empowered to impose penalties under the Banking Act.

"The law to jail people (dealing in cash) is not yet there. What is there are penalties for those found doing that. "We have agreed as Cabinet that a law be put in place. I am not saying cash is not being sold, but I do not know about it because I would not be there when people sell it," said Minister Chinamasa.

His response was met with howls of disapproval from legislators, particularly when he said he wanted to get more information in respect of EcoCash dealers.

Legislators were riled that Minister Chinamasa appeared to suggest he was not aware of a practice that is rampant in the country. Zvimba West MP Cde Ziyambi Ziyambi (Zanu-PF) said a new law would not solve the problem since financial institutions were the major culprits.

"They sell cash and banks are involved. If you want to travel outside the country they will ask you to deposit your money. Where do they think we would have got it (from)?" said Cde Ziyambi.

Minister Chinamasa said he was getting regular reports from the central bank on such vices. He undertook to issue a ministerial statement next week giving full details on the issue.

This was after he was subjected to a barrage of criticism from legislators on why he was not giving precise responses. The legislators were furious that the minister in some instances said he was not aware of any alleged illegal financial practices.

Glen View North MP Mr Fani Munengami (MDC-T) implored Minister Chinamasa to give detailed responses, including information on a proposed $300 million stand-by liquidity facility and central bank governor Dr John Mangudya's views on the performance of the bond notes so far, given that he had indicated that he would resign if they failed to achieve intended objectives.

Dr Mangudya introduced the bond notes as part of the multi-currency system in November last year, stating they would be paid out as an incentive to encourage exports and promote formal Diaspora remittances.

Responding to another question, Transport and Infrastructural Development Minister Joram Gumbo said engineers were already on the ground in preparation for the commencement of the Beitbridge-Harare highway dualisation.

Harare South MP Cde Shadreck Mashayamombe (Zanu-PF) had asked for an update on the project. Meanwhile, the Public Entities Corporate Governance Bill was tabled before the National Assembly yesterday.

The Bill provides for governance of public entities in compliance with the Constitution, provide a uniform mechanism for regulating the conditions of service of members of public entities and their senior employees.

The Bill was referred to the Parliamentary Legal Committee to scrutinise whether it is consistent with the national Constitution.

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