News / Local
'Arresting executives will destabilise market'
14 Oct 2021 at 06:24hrs | Views
THE Confederation of Zimbabwe Industries (CZI) yesterday warned against the arrest of business leaders over alleged currency violations saying this will sour relations between government and business which could lead to a collapse of the local currency.
The statement came after revelations that government intends to arrest top executives of up to 20 big companies following a Reserve Bank of Zimbabwe (RBZ) investigation into alleged abuse of foreign currency procured from the auction system.
The auction system was set up in June last year to avail cheap forex to companies to increase productivity.
The crackdown has been prompted by the widening disparity between the official rate of $90:US$1 and the parallel market rate which has shot past the $180 mark.
In a statement yesterday, CZI president Kurai Matsheza warned that arresting business leaders would cause chaos on the market and erode consumer confidence in government policies.
"The arrest of business leaders will only serve to destabilise the relationship between business and authorities as the two need to work together to re-industrialise the economy in pursuit of Vision 2030," Matsheza said.
"Fear will drive business decision-making as has happened with the 2007 arrests with resultant shortages as companies could not find other ways of funding their forex requirements legitimately."
He added that a heavy-handed approach to a problem that had its cause squarely in sub-optimal policy implementation that was creating arbitrage opportunities that were unsettling markets.
Matsheza said it was the view of the business lobby group that the measures which were agreed this week when business met with the RBZ governor John Mangudya should be given time to take effect.
Meanwhile, the RBZ Financial Intelligence Unit (FIU) yesterday ordered banks to identify and report abuse of accounts and debit cards by foreign currency dealers to facilitate their closure.
In a statement yesterday, the FIU director-general Oliver Chiperesa urged banks to report the culprits before October 18, 2021, saying they were eager to perform their obligations as stipulated in anti-money-laundering laws.
Early this month, RBZ published lists of illegal foreign currency dealers abusing mobile money transfer facilities, blacklisted them, and barred them from using financial and mobile telecommunication services.
Chiperesa said the FIU had noted an increase in abuse of debit cards linked to Zimbabwe dollar-denominated bank accounts.
The statement came after revelations that government intends to arrest top executives of up to 20 big companies following a Reserve Bank of Zimbabwe (RBZ) investigation into alleged abuse of foreign currency procured from the auction system.
The auction system was set up in June last year to avail cheap forex to companies to increase productivity.
The crackdown has been prompted by the widening disparity between the official rate of $90:US$1 and the parallel market rate which has shot past the $180 mark.
In a statement yesterday, CZI president Kurai Matsheza warned that arresting business leaders would cause chaos on the market and erode consumer confidence in government policies.
"The arrest of business leaders will only serve to destabilise the relationship between business and authorities as the two need to work together to re-industrialise the economy in pursuit of Vision 2030," Matsheza said.
"Fear will drive business decision-making as has happened with the 2007 arrests with resultant shortages as companies could not find other ways of funding their forex requirements legitimately."
He added that a heavy-handed approach to a problem that had its cause squarely in sub-optimal policy implementation that was creating arbitrage opportunities that were unsettling markets.
Matsheza said it was the view of the business lobby group that the measures which were agreed this week when business met with the RBZ governor John Mangudya should be given time to take effect.
Meanwhile, the RBZ Financial Intelligence Unit (FIU) yesterday ordered banks to identify and report abuse of accounts and debit cards by foreign currency dealers to facilitate their closure.
In a statement yesterday, the FIU director-general Oliver Chiperesa urged banks to report the culprits before October 18, 2021, saying they were eager to perform their obligations as stipulated in anti-money-laundering laws.
Early this month, RBZ published lists of illegal foreign currency dealers abusing mobile money transfer facilities, blacklisted them, and barred them from using financial and mobile telecommunication services.
Chiperesa said the FIU had noted an increase in abuse of debit cards linked to Zimbabwe dollar-denominated bank accounts.
Source - NewsDay Zimbabwe
