It has been revealed that over $3 billion was externalised from Zimbabwe from 2015 to June 2017. Now if you consider that Zimbabwe’s GDP was just over $16 billion for both 2015 and 2016, a total of about $32 billion, the $3 looks significant. It’s almost 10% of the GDP in that period.
Just how we finally got a figure of $3 billion is not immediately clear. It is probably an estimate because as recently as October 2017, the RBZ said there is a lot of money which is unaccounted for in the country which is moving by all sorts of means. The RBZ made it clear then that they do not know just how much is being lost in illegal dealings.
Not all of the $3 billion was externalised illegally though. The report says $1.8 billion was illegally moved whilst $1.2 billion was expatriated through service fees, management fees, technical fees and royalties.
The government recently granted a three month amnesty for the return of illegally externalised funds and assets, no questions asked.
The list of externalisers includes politicians, prominent business people and some really well known companies. Names of suspected offenders were withheld as investigations are still ongoing. Names were withheld but we were given clues so obvious they might as well have given us the names.
They mention a telecommunications company which shipped out funds legally, up to $60 million in the year to May 2017. They say these funds that were shipped legally were mainly to Mauritius and the Far East. This is spelling it out without actually spelling it out. A telecommunications company shipping funds to Mauritius, ooh, we have no idea who they are talking about.
These companies that are shipping funds legally are now under surveillance.
If it is not illegal then why put them under surveillance?
When they say these companies are shipping out funds legally, they just neglect to include the second part of the statement – as far as they know. They may or may not have suspicions that there could be some illegal stuff going on. That’s neither here nor there in the end because the goal is to stop all leakages of foreign currencies.
It is the central bank’s job to manage foreign currency and it therefore follows that they should monitor the outflows to ensure all is according to the book. Or at least to work with the companies to minimise the outflows in an effort to reduce the negative impact forex outflows have on our economy.
You may remember that time when Standard Chartered was blasted for outsourcing simple bank processes to Kenya and India. The bank was shipping over $20m a year for ridiculous things like bank cards processes, loan approvals and other minor services, like getting a certificate of balance for clients.
Although that was not illegal per se, it was illegal in spirit. Surely certificates of balances can be processed in Zimbabwe. You can’t tell me loans cannot be approved in Zimbabwe. Labour costs cannot be that exorbitant in Zimbabwe.
It was a way to get foreign currency out of Zimbabwe. We all could give a hundred reasons each on why companies would have wanted to move the money they made out of Zimbabwe. So we are not judging but we are imploring all to help in rebuilding this new Zimbabwe.
Would it not be better if the RBZ just kept track of all inflows of foreign currency and then track how those are utilised to pinpoint where the leakages are occurring? It would not, that would actually give warnings to the international ;community that we are moving to a being command economy which would frighten potential investors away.
The RBZ actually manages only 30% of the country’s export receipts while the rest is left at the local banks’ jurisdiction. It should be left like that. Of course it would be difficult to let the market forces do their job if behaviour like the one Standard Chartered was engaging in is allowed to continue.
For Zimbabwe to fix the cash shortages, businesses and individuals have to work together with the government in mutual trust.
6 comments
Hhmmm Standard Chartered Bank might have done whatever they deemed necessary to save their hard earned money but i jus so hate that bank. What they did wasn’t “cool” at all, same as the Telecomms Co. that we don’t know lol
Given the Central Bank history of Zimbabwe, is it surprising that companies would attempt to move their funds outside of the nation? And placing those companies under surveillance will only spook them more.
Maybe a better strategy is to provide favorable terms for repatriation and a more conservative Central Bank strategy when it comes to currency management?
Leonard is back again to spew more RBZ propaganda.
Simple question i would like to ask is , if the RBZ is aware that someone is doing something illegal and they are able to provide this kind of data , why are they not doing anything about it?
Another question, what are the average US dollar currency outflows for say the last 5 years? I ask this question because it may very well be that the quoted figures are not abnormally high and are in fact normal.
The real reasons for our cash crisis are known. This Leonard fellow seems to be a troll employed by RBZ, trying to pull the wool over everyone’s eyes.
The fact is the rbz of complicit in the banks with ridiculous charges… Probably allowing then to get away with everything add long as they buy treasury bills then they turn a blind eye…
Last I checked the RBZ has a financial intelligence unit responsible for investigating and acting on money laundering and externalisation. Furthermore if the central bank is involved in approving my $200 Visa card payment, what more of millions by companies?
RBZ is a very large useless national “bank”. Why not scrap the white elephant and open something smaller, leaner and which knows what is going on? Why are taxpayers funding these fembera fembera outfits? Where has this “model” worked before?
As it is the physical size of RBZ is inversely proportional to the amount of “reserves” held there!!