Last month, the Reserve Bank of Zimbabwe (RBZ) paved way for members of the public to buy US$50 per week using the official rate, which is almost half of the parallel market rate.
But it has been observed only a few people with connections are the ones who can access forex, raising speculation that these ‘elite individuals’ were driving the black market.
The auction market rate hovers around US$1 for ZWL$85 to ZWL$88 while the black market rate is ZWL$180 to ZWL$200 for the same US$1.
Participating in a WhatsApp online discussion convened by Amakhosikazi Media on public access to foreign currency at prevailing auction rate Wednesday, Bulawayo residents complained the economy was managed by criminal syndicates who abused the auction system.
Political analyst, Effie Ncube highlighted that in a multi-currency setting and in a collapsed economy, the foreign exchange rate was ‘easily’ determined by criminal syndicates.
“If you see a country’s currency rate decided on the streets, it means political power has shifted from people who are supposed to be in charge to the streets.”
Ncube said to do away with criminals, the proper action was to stop the auction system and make people access forex from banks.
“How? The economy should be fixed so it starts generating forex. To fix the economy, you fix the politics, then the currency will be strong and investors will come in. There are no investments because of political uncertainty,” he explained.
“Otherwise this auction system will not work for someone in Plumtree, Gwanda, Binga, Nkayi or Inyathi. People will continue going to the black market where the exchange rate is determined by the criminals, who are rich and well connected and are the very same people selling it on the streets.”
The analyst claimed the auction system was feeding into corruption.
“This is sort of a controlled black market that will be running via the RBZ literally that is how I will term it though officially it is not called that. You have this vicious cycle that continues supplying corruption and those who suffer are the ordinary people because the criminal syndicate is in charge accessing forex and selling it on the streets, buying it again from you while cheating you then taking money back and bringing it back.
“It’s a few people who do this, who create artificial shortfalls, where money circulates among themselves. If you deposit a million pounds today, go to the same bank to withdraw 50 pounds you will not get it because that money is directed to a few individuals,” Ncube said.
An Enterprise Development Practitioner Sibusisiwe Muperere said there were ‘no known’ measures put in place by authorities, specifically to deal with forex leakages.
“The government is on record, saying it will arrest people who do so, but not much of that is being seen on the ground. The reason being for as long as there is a black market rate, there will always be people exploiting the opportunity to profit from forex that is obtained via RBZ channels such as bureau de changes and the auction rate,” she said.
Mupere explained the reason why there was a black market rate was the lack of balance between the forex demanded by the public and available supply.
“For that reason, not everyone is going to be able to access the forex. So because there is not enough forex to cater for everyone, there are going to be people with access to the auction rates who explore that opportunity and take advantage of the excess demand to drive the prices up,” she said.
Consumer Council of Zimbabwe (CCZ) Matabeleland regional manager, Comfort Muchekeza urged authorities to thoroughly investigate who these criminal syndicates were.
“The government or our political leaders should come out clean on this one, if they are not part of this syndicate or beneficiaries so they can stop this rot. They have all the machinery to deal with this but it seems doing so will burn their hands since it seems their hands are also deep in the rot,” he said.
“Acting decisively will gain our confidence and trust. We want arrests, fair trials which lead to conviction and deterrent sentences.”