HARARE – It was Old Mutual, then EcoCash, and much recently retailers. On Monday, Zimbabwe’s finance ministry added a new name to a growing list of what the regime calls economic saboteurs undermining the local currency: government contractors.
Finance minister Mthuli Ncube said the Zimbabwe dollar – currently exchanging for about 850 to the United States dollar on the black market – was being undermined by government contractors who rush to buy United States dollars as soon as they are paid.
Ncube threatened to blacklist company directors and also freeze bank accounts – the latest threat-laden intervention by the ministry which is desperate to shore up the inflation-ravaged Zimbabwe dollar.
“The government has noted with great concern that some suppliers who supply goods and services to government institutions are channelling the funds they receive to the illegal foreign exchange market, thereby contributing to exchange rate and price instability,” Ncube said in a statement.
“The Financial Intelligence Unit will follow up and scrutinise all payments made to government suppliers, to establish how the funds have been utilised.
“Where it is determined that funds were channelled to the illegal foreign exchange market, the bank accounts involved will be frozen indefinitely pending criminal investigations and prosecution of the companies concerned and their directors and officers.”
The government has been making huge payments in the local currency to companies carrying out road infrastructure projects, and payments to these companies have allegedly coincided with huge demand for United States dollars and loss of value by the local unit.
The companies include Fossil Contracting, Tensor Systems, Masimba Construction, Exodus & Company, and Bitumen World, all of which were awarded multi-billion-dollar road rehabilitation contracts.
Ncube warned: “Proceeds from the illegal transactions will be forfeited to the State in terms of the Money Laundering and Proceeds of Crime Act [Chapter 9:24].
“The suppliers concerned, their directors and related companies will be blacklisted with the Procurement and Regulatory Authority of Zimbabwe and will be banned from participating in any government tenders.
“In addition to the above measures, government is setting up a process to scrutinise all awarded tenders to ensure that government is getting full and fair value.”
