Chaos ensues as money changers evade arrest and devise new trading tactics


AFTER evading police arrest last week, 34-year-old James, a Harare-based illegal foreign exchange dealer, is still in the game and has devised other means of trading in United States dollar amid a clampdown on foreign currency trading on the parallel market.

A police blitz recently arrested 65 suspected foreign currency dealers as the new Zimbabwe Gold (ZiG) currency showed early signs of fragility on the parallel market.

The ZiG currency was launched early this month when Reserve Bank of Zimbabwe governor John Mushayavanhu released his inaugural Monetary Policy Statement pegging it at a rate of US$1 to ZiG13,56.

The parallel market exchange rate, however, jumped to ZiG20 to the United States dollar in a few weeks giving the government a fresh headache while exposing the government’s patent naivety in dealing with the age-old currency turmoil.

By Friday last week, the police had arrested more than 100 suspected foreign exchange dealers and the traders have virtually deserted the streets fearing arrests.

Their fears were compounded by Vice-President Constantino Chiwenga’s threats against the foreign currency dealers.

He said the buying and selling of ZiG on the parallel market was a criminal offence similar to selling gold.

NewsDay interviewed several foreign currency traders who dismissed Chiwenga’s threats.

“We are all in this mess together. The police can come to assault us because of the directive by Chiwenga but after work they will come to us asking for the US dollars,” a foreign currency dealer in Harare said.

“We are not on the streets but we now have other means of trading and this can be done over a phone call and what we are doing is not being seen on the pavements because we are now cautious in everything we are doing.”

He vowed to return to the streets.

“In a few weeks we will return to the streets again, we are just like vendors and we also want to earn a living,” he said.

Another forex dealer said the government should ensure that both the rich and poor have access to US dollars.

He said the demand for the US dollar had since gone up after the arrest of their colleagues.

“If the government wants everything to be normal, everyone should now have the US dollar regardless of being rich or poor.

“If you want to look at it the US dollar is making rounds among the rich people only and that is why this is difficult for most of the people,” he said.

The illegal foreign currency dealers said they would remain relevant in Zimbabwe as long as ordinary people have no access to foreign currency in banks.

They also revealed that police details were making a killing demanding money from some illegal dealers after effecting arrests.

“Whenever there is an operation like this, there are people who will benefit and there are some police officers who are taking bribes from some money changers upon arrest,” they said.

However, national police spokesperson Assistant Commissioner Paul Nyathi dismissed the allegations challenging the people to report any police details soliciting for bribes.

“I am not even aware of that and those people with evidence should come forward so that we can carry out our own investigations,” he said.

Economist Gift Mugano said the government was targeting the wrong challenges.

“I do not want to sound as if I am fighting for the black market. The biggest challenge we have is Treasury which pumps liquidity into construction works,” he said.

“If you arrest the money changers at Copacabana you are not doing anything. These people are jobless and the government is marking the wrong man.

“The wrong man is the Finance ministry which is using the wrong model to finance infrastructure; you cannot finance infrastructure with cash.”

“The money changers at the Road Port are just part of the ants on a mountain and the mountain is Treasury.

“Do you think the government has enough police to arrest seven million people because almost everyone has been changing money on the parallel market?”

Another economist Prosper Chitambara said confidence building measures will determine the success of ZiG.

“The people should have faith in their currency as well as the institution managing the currency. If that confidence is created we are not going to see all these problems we are facing,” he said.

Political analyst Rejoice Ngwenya said arresting the foreign currency traders was addressing the symptoms and not the problems facing the economy.

“They should make sure that money is available. If you arrest them [money changers] they will still come back when there is hyperinflation.

“The government should make sure that the money is available in the bank otherwise the foreign currency dealers will come back eventually,” he said. NewsDay.

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