The government yesterday fired the Zimbabwe Revenue Authority (Zimra) board and also introduced a slew of measures aimed at stabilising the economy and stemming rising prices of goods.
The new measures come as there are growing fears that the economy could be slipping back to the 2008 hyperinflation era when both the Zimbabwe dollar and savings were wiped off to the pain of the nation.
Presenting his maiden fiscal statement yesterday, Finance minister Mthuli Ncube said government had begun introducing tough economic reforms which included cutting State expenditure, as well as enhancing public sector efficiencies and good corporate governance.
“In order to enhance governance at Zimra, I hereby terminate the term of the current board with immediate effect. I have proposed names of new board members which are currently being cleared.
“The new board will be announced in due course. In the meantime, Zimra senior management will be reporting directly to Treasury.
“Zimra senior management is hereby directed to cease all recruitment of new personnel … until a new board is in place … to allow the new board to have input into critical appointments,” Ncube said.
“Going forward, systems of Zimra will be upgraded and enhanced in order to improve efficiency in revenue collection, especially at border posts.
“Mechanisms will also be put in place to eradicate any corrupt activities,” he added.
The national tax collector, like most State-owned enterprises, has been accused of breaching good corporate governance principles — including failing to combat allegations of corruption by some of its senior staff.
Willia Bonyongwe, wife to former Central Intelligence Organisation (CIO) director and later former Justice minister Happyton Bonyongwe, chaired the fired board.
Ncube also laid bare the extent of the government’s problems yesterday when he revealed that its domestic debt has ballooned from $276 million in 2012 to nearly $10 billion today.
Zimbabwe’s external debt also now stands at $7,4 billion — bringing the country’s total debt to $17 billion.
Ncube said driving the government’s huge debt was the issuance of tradable paper that it uses to borrow from banks — Treasury Bills (TBs) — which had increased from $2,1 billion in 2016 to $7,6 billion by the end of August this year.
“Accordingly, government in its management of domestic borrowing, is reviewing the use of Treasury Bills in support of socioeconomic development programmes.
“Going forward, Treasury will seek to finance government’s vital socioeconomic development programmes by use of instruments that ‘crowd in’ the private sector, including public private partnerships or government guarantees to financial institutions,” he said.
Meanwhile, presenting the post-election Monetary Policy Statement (MPS) at the same occasion, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya ordered foreign trucks to pay for fuel using foreign currency — as part of measures to raise foreign currency.
The central bank boss said they had noted that foreign truckers were trading on the parallel market, and were purchasing fuel using bond notes.
“It has come to the attention of the bank that foreign truckers plying Zimbabwean routes are involved in foreign currency arbitrage activities in Zimbabwe by trading in the parallel market of foreign currency and purchasing fuel in Zimbabwe at the official rate of exchange.
“In order to deal with this rent-seeking behaviour, with immediate effect all foreign truckers plying the Zimbabwean routes shall pay for their fuel in Zimbabwe in foreign currency.
“The same shall apply to foreign traders buying goods in Zimbabwe for sale in neighbouring countries,” Mangudya said.
He also announced the re-introduction of Foreign Currency Accounts (FCAs) to allow foreign currency earners to hold their hard-earned cash away from RTGS accounts which, although denominated in US dollars, cannot be withdrawn on demand.
“With immediate effect, all banks are therefore directed to effectively operationalise the ring-fencing policy on Nostro foreign currency accounts by separating FCAs into two categories — namely Nostro FCAs and RTGS FCAs.
“Accordingly, all banks are directed to use their know-your-client (KYC) principles to comply with this directive to separate the accounts without requiring their clients to complete any other documentation other than for new bank accounts.
“Banks have been provided with a period of up to October 15, 2018 to fully comply with this policy measure.
“As a further support to this measure and to provide credit enhancement or deposit protection for the Nostro FCAs, the Reserve Bank is finalising discussions with the African Export-Import Bank(Afreximbank) towards a $500 million Nostro Stabilisation Guarantee Facility (NSGF) to provide Nostro FCA holders with assurance that foreign currency shall be available when required by the account holders.
“The NSGF, which will be similar to the AFTRADES Facility that guarantees interbank trading in Zimbabwe, is targeted to be in place by the end of October 2018,” Mangudya said.