22 October 2018

Zimbabwe: Mangudya in ED Line of Fire for Failing to Tame Illegal Forex Trade

Photo: The Herald
Reserve Bank of Zimbabwe Governor John Mangudya.

President Emmerson Mnangagwa's patience with Reserve Bank of Zimbabwe (RBZ) governor John Mangudya could be wearing thin, if his comments in the state run media are anything to go by.

Writing in the second instalment of his weekly contribution in The Sunday Mail, Mnangagwa could not hide his exasperation with failure by his lieutenants to rein in the parallel currency market that has continued to wreak havoc in the economy.

"Considering that more than $9 billion is passing through different electronic platforms and leaving an 'electronic trail', it is inconceivable that these illicit transactions have and can ever go on undetected or unnoticed. It simply cannot be," the President said.

Mangudya has watched helplessly as the illegal forex market thrives while the official economy struggles with hard and local currency shortages.

Questions have however been raised over the central bank chief's capacity to bring a stop to the vice with claims some powerful individuals and firms were involved.

The continued mismatch between the local and foreign currencies, coupled with general mistrust of the Zanu PF led system, has eroded public confidence in the country's banking sector.

Mnangagwa conceded the country had no laws that regulated black market activities.

He said his government was now working towards crafting a statute to respond to the challenge.

"Currently, we have no legislation to deal with currency manipulators. We therefore need urgent and robust measures to deal with this financial menace.

"Accordingly, I have now instructed the Minister of Justice, Legal and Parliamentary Affairs (Ziyambi Ziyambi) to work closely and expeditiously with the Attorney-General in order to produce a new set of regulations which will be promulgated under temporary law-making powers which I, as President, am allowed by the Constitution.

"These regulations will remain in force for a statutory period of six months, during which a Bill will have to be processed for consideration by our legislators," said the country's leader.

Police claim they arrested street cash traders with links to prominent people who are yet to be named.

Unconfirmed reports suggest Mnangagwa is set to replace Mangudya when the RBZ boss's first term ends in February next year.

Banker John Mushayavanhu, one of the President's acolytes, according to sources, is tipped as a possible replacement.

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