ED closes in on money changers

HARARE - President Emmerson Mnangagwa’s administration is apparently closing in on foreign currency kingpins — amid indications that a number of Zanu PF bigwigs and prominent businesspeople are among those facing imminent arrest.

Well-placed sources told the Daily News yesterday that the “rogue” Zanu PF hotshots and top businesspeople — mainly of Asian descent — had also been funnelling out tens of millions of dollars from Zimbabwe in hard currency every month through “well-run” syndicates that involve bureaucrats and law enforcement agents.

This comes as the foreign currency black market is gaining momentum again, after parallel rates had cooled down significantly going into last weekend.

Our sources said authorities had now established “beyond doubt” that the foreign currency black market was controlled by a number of notable local and foreign people.

These people were running “a well-oiled” machine, siphoning coveted greenbacks from the country to places such as Dubai, in the United Arab Emirates, and neighbouring South Africa.

What had shocked authorities was that these cabals included security agents who were issuing out hundreds of illegal police identity cards — which enabled the criminals involved safe passage at roadblocks and security check points.

The stunning revelations come days after Mnangagwa said the country’s parallel foreign currency trade was militating against the government’s efforts to rebuild the shattered local economy.

In an ominous warning at the weekend, the Zanu PF leader said illegal foreign currency dealers should now be treated as a threat to national security.

The revelations also come after Reserve Bank of Zimbabwe (RBZ) governor John Mangudya recently alleged that foreign currency dealers were being funded by “influential” people.

The governor also questioned how it was possible that the dealers were able to evade the attention of law enforcement agencies.

“The people moving money onto the black market, the people behind the money changers are not your ordinary Zimbabwean … These are influential people with access to huge sums of cash.

“It has been discovered that one character has been pushing onto the black market as much as $48 million in foreign currency,” Mangudya said.

The Daily News’ sources said yesterday that it was now “a matter of time” before many of the parallel market foreign currency kingpins and their runners were nabbed by authorities.

“The tumultuous events of the past two weeks, which triggered shortages of basic consumer goods and the collapse of bond notes against the US dollar, have sharpened the resolve of ED and the government to deal with these dealers decisively.

“Indeed, there is a group of money launderers that changes millions of dollars a day and externalise this money.

“These criminals are the ones controlling the exchange rate on the black market.

“They are also cleaning their dirty money by bringing in drugs which are being smuggled in containers of different goods being imported into the country,” one of the sources said.

“When they sell the US dollars, these people are given RTGS rates — about 90-100 percent in the banks. They then buy local products and change this to cash, before re-selling the cash and thus maximising their profits all round.

“The criminals also have large sums of money in South Africa and Dubai, which they sell for RTGS on a daily basis,” the source added.

“Besides drugs, they also deal in gold and diamonds. Most of their runners running around with their cash ... join neighbourhood watch committees where they get police cards to use for these activities. 

“Because they are part of syndicates, they use their identification cards at road blocks and in various places to evade the law,” another source, who says Mnangagwa has recently been briefed on all this, said.

“What is clear is that many law enforcement agents at our airports and borders are involved in this ... 95 percent of these people are also not banking their money and have got many companies that they use to evade taxes.

“Similarly, many wholesalers are buying goods from local companies using RTGS transfers and then selling the goods for cash and re-selling the cash afterwards to the black market.

“This is why the price of basic commodities is increasing everyday,” the second source claimed.

“Government should put a special unit, for example, the army in all these investigations, as other law enforcement agencies are corrupt and not loyal to the State.

“Most local people that are money launderers and who are externalising the money have bought properties and luxury vehicles and do not pay taxes, and are thus undermining the government,” the source said further.

Apart from this, Mnangagwa has also apparently been told of how some petroleum companies were getting fuel using the official RTGS rate to the US dollar of 1:1 — and then selling the product in neighbouring countries where they were getting more money for products and in foreign currency.

“People are also selling the money that they get from fuel sales on the black market and also externalising the fuel meant for the country.

“After the fuel is paid for by the Reserve Bank, it is then sold to neighbouring countries and the people who own the service stations just send an empty truck to the border and pay for the duty as a formality, and thereafter the truck returns back to South Africa,” the sources said.

Mnangagwa — who was elected as Zimbabwe’s substantive leader in the hotly-disputed July 30 national elections — has been working hard to revive the country’s battered economy.

Recently, his government’s austerity measures, which are seen as the first steps towards reviving the country’s economy, did not find resonance with the majority of fearful Zimbabweans.

However, Mnangagwa has said the country must endure this “temporary” pain as the measures take root.

The government’s new measures resulted in panic buying and volatility in the economy, which saw parallel foreign currency market rates shooting through the roof.

Comments (15)

The chickens are coming home to roost.

bongoman - 17 October 2018

Zvirikupera izvo. ED is real and he will win the war. Lets clean and have a fresh economic environment where money deals are always done in the bank. People are tired of street deals..Lets be real guys. No going back because the Robbers and Mugggers destroyed everything. We hear kuti that joki from the Robbers and Muggers is also in this money changing fiasco. Lets deal with them harshly. This time.....hapana anosara...

Clemence Tashaya - 17 October 2018

ED must levy WEALTH TAX on properties as a matter of extreme urgency. Money corruptly obtained is either invested in real estate in Zimbabwe or externalised. Those who can prove source of funds used to buy properties should pay 5% wealth tax levy. Those who cannot prove source of funds should pay 100% of market value of property or lose the property. The UK has enacted (February 2018) the Unexplained Wealth Orders (UWOs) where assets are seized and auctioned if an individual fails to prove that he/she acquired wealth in an honest and transparent manner.

Ndiani Ndiani - 17 October 2018

The above narrative is a ruse. The frank truth is that it is RBZ which is buying forex on the black market thereby increasing rates. Recently, the RBZ even lied that they had drawn down from the so called Afreximbank facility the US$41m which they paid for fuel with. Trunks containing sealed bricks of crispy bond notes we see on the market originate direct from RBZ.

Bhonzo - 17 October 2018

Recently I failed to raise fees for my son studying abroad because the bank did not receive forex from RBZ for 3 months! I was forced to go in the black market so that my son would not be deported for non payment of fees. My question is; if the banks do not have forex and only a limited amount of bond currency which they try to spread around sometimes limiting withdrawals to $20 per customer whose money is on the streets?

Madyirapazhe - 18 October 2018

Sometimes people always want to turn away from the truth. In towns and cities 90% of them do not trust zanu pf. Remember people lost their savings before through this zanu pf administration. It will be stupidity for RBZ and Mtuli Ncube to trust and believe that people will trust the banks again. When people lost all their money we were forced to open USD accounts and now they have taken our USD and gave us bonds. Zanu pf and ED need to work very hard to gain peoples trust. The rural folks contribute nothing to this. Towns and cities and the business community it is Chamisa who is the big dog and that's his territory. If you invade someone territory without talking to them its a disaster and this kind of war is a war of trust. The more you use force and brutality the more things get worse. Do you really think a normal person will take his USD or Rands, Pula to the banks of Zimbabwe, then the tellers vanopururudza they will simply cash in bonds not real money. ED wake up and smell the coffee. Leading is all about leading people who have faith and trust in you. I mean people with economic powers or game changers

Gumbo - 18 October 2018

Why does this administration waste time "briefing" ED? Can't they just do their job and arrest whoever? Why the slow motion or hesitation? Is it a way to alert the culprits or senior govt officials involved to cut links?

Sagitarr - 18 October 2018

look, this thing about targeting money changers is just damage control. The real solution to is not to chase around arresting people that are filling a gap banks are struggling with, its making sure the banks walk the talk and produce USD on demand so people don't que to get the currency...

pfungwa - 18 October 2018

corruption is emanating right straight from the rbz where mint conditioned bond notes are being released onto the parallel market.first a commission of inquiry needs to be set up to deal with this menace as a matter of urgency.Secondly,where are the so called money changers getting the USD.Investigate and you will be shocked with the names that will be unearthed.wake up time is running out before we plunge into a non-revearsible situation economically.

mafirakureva - 18 October 2018

We heard that before. Remember the externalised funds. What came out of it? They even said the money had been returned to Zimbabwe...and those who did not return will be brought to book.... Who was brought to book then? Well said Gumbo leadership and trust is like hand and glove.... Mr ED and MOF you rushed to make economy policies without making an effort to restore confidence and trust in the pple you are to lead.... Build confidence, educate and involve pple in whatever policies that you come up with.... We have a failed bond note case and now you call it RTGS where did our USD go to? Bond note was backed by the 200 mil Afrexmbank and now the same RTGS is backed by 500 mil Afreximbank.... tell us whats the DIFFERENCE HERE? Is this not simply changing terminology to run awaya from the truth ?

A.C - 18 October 2018

The most dangerous people who are a real threat to ED's seemingly progressive administration are the very close connects to his door. They will eventually win and destroy him if he is not careful

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Wilson - 19 October 2018

clemence tashaya usarotomoke ED chiiii chaakagona kunyeba chete atadza kutonga nyika zvamunetsa ,asi kunyeba ndiko anogona,you cant rig economy

yatsva kombonii - 21 October 2018

As long as the fallacy that the Bond or Rtgs is equal to the US Dollar persists, it is impossible to destroy the parallel foreign exchange market. The bond or rtgs can never be equal to the USD until we have excess USD reserves, such that one can walk into any local bank and exchange bonds for USD without any restrictions. To wish otherwise is a pipe dream and the "Learned" Minister knows or should know this. In any case, who puts brand new bond notes into the parallel market???????????

Common Sense - 22 October 2018

We really wish the President, but we have seen all this before. The truth is there is nothing they can do to these people. The truth is the RBZ is printing money why else would brand new bond notes be found at roadport,and these people are only competing with the RBZ. Gono managed to fool everyone and Mangudya is trying to do the same. We the people will have to silently bear the brunt. This is our Government and we do wish them well irrespective.

Walter Taderera - 24 October 2018

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