News / Local
19 firms blacklisted for fuelling black market
11 Nov 2022 at 00:02hrs | Views
NINETEEN contractors providing Government with goods and services have been blacklisted for channelling funds to the foreign exchange black market, Finance and Economic Development Minister Professor Mthuli Ncube said this week and will never win a Government contract again.
In a statement on Wednesday, Prof Ncube said the blacklisting arises after the Financial Intelligence Unit of the Reserve Bank started monitoring what happens to the payments from Government to its suppliers, which led to the discovery that some are dealing in the black market, and then working out the measures needed to deal with contractors involved in illegal deals to break the black market.
He identified the 19, almost all of which are private limited companies, as: Nariox, New Age Marketers, Pepwit Investments, Tirumi Investments, Mwendo Africa, Alg World Investments, Lobmer Investments, Nisbank Enterprises, Sailgroom Enterprises, Wayvar Investments, Poweride Safaris, Azelion Energy, Blackdeck, Paza Buster, Redan Coupon, The Best Car Rental, The Legacy Car Rental, Josam Enterprises and Construction Warehouse.
Even with the changes introduced in recent months, where the procuring ministry and then the Finance Ministry has to check that the Government is receiving value for money, that is that the goods and services are not overpriced, Prof Ncube said some contractors who passed through that process and received their payment from Government still tended to race off and buy foreign currency on the black market.
That sort of dealing just pushed domestic inflation.
The companies moving into the black market were not just buying foreign currency from black market dealers, but were following other paths as well to gain foreign currency at black market prices.
"The FIU has noted that upon receiving their payments, the companies would engage in spontaneous illegal foreign currency transactions through buying foreign currency from individuals and entities," he said.
"It was also noted that some of the companies would engage in transactions which are not related to their line of business. Some would also purchase fast moving consumer goods from various manufacturers and the goods would then be sold exclusively in foreign currency."
Prof Ncube said the Government continues to implement informed bold measures in an endeavour to promote stability and position the economy on a sustainable growth trajectory.
"The measures being implemented are in sync with the announcements by his Excellency the President on May 7 2022, which managed to instil discipline and curb speculative behaviour," he said.
"Subsequent supportive policy measures from the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe during the course of the year have signalled to the market, Government's utmost commitment to maintaining price stability, and restoring market discipline, which in turn will engender market confidence."
Prof Ncube said on August 18, 2022, the ministry issued a statement advising the public regarding the institution of a process to enforce value for money on all payments to suppliers and contractors to central Government, departments and agencies.
"After a careful analysis, it was observed that certain pricing behaviours and trends in the supply chain to Government agencies and ministries pointed to weaknesses in the procurement framework, and that these loopholes contributed to distorted pricing practices by the market and effectively fuelled inflation in the economy.
"A ‘value for money' exercise is underway to strengthen procurement systems and to improve management of payment cycles for Government contracts," he said.
Kadoma economist and motivational speaker, Dr Kudzanayi Vere, hailed the Government for hitting hard on errant firms.
"The parallel market rates hikes have been a very big cancer in our economy which for the past two months the Government had successfully contained through the central bank and this had brought some form of stability in commodity pricing.
"So, anyone playing against such efforts must be decisively dealt with because the person who suffers the most is that old lady and that poor family in Binga and Katerere," he said.
Accountant Mrs Tsitsi Rwizi said the Government should also freeze accounts for individuals that were benefiting from the illegal financial dealings.
"We applaud what the Government is doing in trying to maintain fiscal discipline. There has been economic stability for months now and we cherish that a lot. While the perpetrators are being punished. I believe even those benefiting should suffer the same fate," she said.
Economist Mrs Evelyn Mpandawana said the blacklisting of firms fuelling economic instability was the way to go.
"This serves as a good lesson to companies that were now causing speculative behaviour on the market. The current economic stability that has been enjoyed over the past months should be maintained. It gives people chance to plan properly," she said.
In a statement on Wednesday, Prof Ncube said the blacklisting arises after the Financial Intelligence Unit of the Reserve Bank started monitoring what happens to the payments from Government to its suppliers, which led to the discovery that some are dealing in the black market, and then working out the measures needed to deal with contractors involved in illegal deals to break the black market.
He identified the 19, almost all of which are private limited companies, as: Nariox, New Age Marketers, Pepwit Investments, Tirumi Investments, Mwendo Africa, Alg World Investments, Lobmer Investments, Nisbank Enterprises, Sailgroom Enterprises, Wayvar Investments, Poweride Safaris, Azelion Energy, Blackdeck, Paza Buster, Redan Coupon, The Best Car Rental, The Legacy Car Rental, Josam Enterprises and Construction Warehouse.
Even with the changes introduced in recent months, where the procuring ministry and then the Finance Ministry has to check that the Government is receiving value for money, that is that the goods and services are not overpriced, Prof Ncube said some contractors who passed through that process and received their payment from Government still tended to race off and buy foreign currency on the black market.
That sort of dealing just pushed domestic inflation.
The companies moving into the black market were not just buying foreign currency from black market dealers, but were following other paths as well to gain foreign currency at black market prices.
"The FIU has noted that upon receiving their payments, the companies would engage in spontaneous illegal foreign currency transactions through buying foreign currency from individuals and entities," he said.
"It was also noted that some of the companies would engage in transactions which are not related to their line of business. Some would also purchase fast moving consumer goods from various manufacturers and the goods would then be sold exclusively in foreign currency."
Prof Ncube said the Government continues to implement informed bold measures in an endeavour to promote stability and position the economy on a sustainable growth trajectory.
"The measures being implemented are in sync with the announcements by his Excellency the President on May 7 2022, which managed to instil discipline and curb speculative behaviour," he said.
Prof Ncube said on August 18, 2022, the ministry issued a statement advising the public regarding the institution of a process to enforce value for money on all payments to suppliers and contractors to central Government, departments and agencies.
"After a careful analysis, it was observed that certain pricing behaviours and trends in the supply chain to Government agencies and ministries pointed to weaknesses in the procurement framework, and that these loopholes contributed to distorted pricing practices by the market and effectively fuelled inflation in the economy.
"A ‘value for money' exercise is underway to strengthen procurement systems and to improve management of payment cycles for Government contracts," he said.
Kadoma economist and motivational speaker, Dr Kudzanayi Vere, hailed the Government for hitting hard on errant firms.
"The parallel market rates hikes have been a very big cancer in our economy which for the past two months the Government had successfully contained through the central bank and this had brought some form of stability in commodity pricing.
"So, anyone playing against such efforts must be decisively dealt with because the person who suffers the most is that old lady and that poor family in Binga and Katerere," he said.
Accountant Mrs Tsitsi Rwizi said the Government should also freeze accounts for individuals that were benefiting from the illegal financial dealings.
"We applaud what the Government is doing in trying to maintain fiscal discipline. There has been economic stability for months now and we cherish that a lot. While the perpetrators are being punished. I believe even those benefiting should suffer the same fate," she said.
Economist Mrs Evelyn Mpandawana said the blacklisting of firms fuelling economic instability was the way to go.
"This serves as a good lesson to companies that were now causing speculative behaviour on the market. The current economic stability that has been enjoyed over the past months should be maintained. It gives people chance to plan properly," she said.
Source - The Herald
