Parliament endorses new forex law

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THE Zimbabwean parliament has backed President Emmerson Mnangagwa’s 2018 temporary measures, which carries a mandatory 10-year jail sentence for illegal foreign currency traders.
The temporary measures, which also pertained to the illegal trading of gold, were approved for adoption as law by parliament in December as part of the Finance Bill of 2019.
The Finance Act was subsequently published in a Government Gazette dated February 20, 2019.
The Exchange Control Act, which previously provided that offenders were liable to paying a fine of not less than the value of the gold or currency concerned, has thus been amended.
“Where the offence of which a person is convicted involves the unauthorised dealing in, other than the exportation, externalisation or expatriation from Zimbabwe, of any foreign currency, gold or precious stone, the court may, in addition to the fine…impose a sentence of imprisonment not exceeding ten years,” reads the amended Act.
Mnangagwa, who was under pressure to make good on pre-election promises to mend the broken economy, had enacted the temporary law as part of measures to end parallel market trading which is widely blamed for fuelling price increases.
This comes as the southern African nation, which adopted a multicurrency system after dumping its hyperinflation-hit currency in 2009, has been gripped by a shortage of hard currency, which has seen official inflation climbing to a post dollarisation high of 56 percent for January this year.
The parallel market has also been blamed for denying the country the much needed foreign currency through underhand dealing of gold, its top forex earner.
“We feel that with the current challenges, we are losing gold to other markets. I am very convinced that we are already at 100 tonnes, but we are losing more gold to under-declaration and smuggling. We may be losing as much as two thirds to the grey market,” deputy mines minister Polite Kambamura told leaders of the Zimbabwe Miners Federation at a meeting in Harare last week.
Zimbabwe last year exported 33 tonnes of gold.
Parliament however deleted from the Finance Bill, the clause which sort to confirm Mnangagwa’s temporary regulations on Unexplained Wealth Orders.
Parliamentary watchdog, Veritas, however, indicated that the statutory instrument will expire at midnight on May 8, 2019, if it is not confirmed before then by parliament.
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