ICAZ says forex dealers arrests  fueling ZiG denial, negative speculation

By Agencies

THE Institute of Chartered Accountants of Zimbabwe (Icaz) has recommended that the government withdraw police officers from hunting down foreign currency dealers on the parallel market, saying the mass arrests are not inspiring confidence in the newly introduced Zimbabwe Gold (ZiG) currency.

Icaz technical director Owen Mavengere told parliamentarians sitting in the Joint Parliamentary Committee on Budget, Finance and Investment Promotion as well as  Industry and Commerce, who were canvassing for views on the impact of the newly introduced ZiG that the government should address the root cause rather than dealing with symptoms.

Since the introduction of ZiG, the government directed police officers to round up foreign currency dealers lurking in the streets of Harare accusing them of inflating the exchange rate of the new currency.

“A soft approach, the use of the police sends an incorrect message and causes panic. We should handle the root cause because remember the parallel market and those dealers on the street are a symptom of a problem. So sending the police doesn’t really inspire confidence,” said Mavengere.

According to the Zimbabwe Republic Police, 65 people (as at 21 April 2024) had been placed in custody and are yet to be granted bail for tampering with the exchange rate.

Icaz also raised concern over the hurried introduction of the currency.

Mavengere said the approach opened room for fraud. Mavengere also suggested that advance warnings and ample transition time would have reduced public mistrust.

“Advance warning on changes would have been very good because sometimes we do need a couple of months to change systems, we have done it but behind the scenes there are still a lot of issues that are still pending. Errors and fraud need to be looked out for so the audit profession will be quite busy this year to make sure that the transition, whilst it was done and we are now transacting, but behind the scenes did we do everything correctly?” he said.

Mavengere also urged the government to stimulate demand for ZiG by accepting the currency.

“I just wanted to touch on the demand for local currency. There must be a roadmap on how to get to 100%. I really liked what Sekai [Kuvarika, chief executive officer of the Confederation of Zimbabwe Industries], spoke about when she recommended things like PAYE, so for us everything that has to do with the government should eventually be paid in ZiG, but there must be a roadmap to say we are starting at 50% all the way up to a 100% so that it sends the correct message. If the government itself is taking ZiG, it forces everyone to be looking for the ZiG because, remember, it’s a supply and demand issue,” he said.

“If the government is confident, then naturally everyone else will be confident as we head towards 2030, but that roadmap should give us a period well before 2030 so that by the time 2030 arrives, it won’t be newsworthy that we have transitioned to ZiG because it would have happened years prior. People’s minds must be conditioned; it cannot be legislated,” he said