HARARE – (FinX) As part of efforts to eliminate the black market for foreign currency and contain inflation in the process, Government will soon require those who import goods to officially declare sources of foreign currency.
Zimbabwe has a predominantly large informal economy – the second largest in the world after Bolivia. Within that informal sector, most of the players who import goods for trade, access forex through the black market. This includes downtown grocery tuck-shops and clothing boutiques.
But now after having formalised the use of local currency in June, the Ministry of Finance and Economic Development is now working on policies to eliminate the black market, which has thrived largely due to Government’s control over the allocation of forex in the country.
Deputy Minister of Finance Clement Chiduwa said that among the policies that Treasury is working on is the need for importers of goods to officially declare where they sourced forex.
“We are well aware most people who buy money from parallel market use that money to import goods. As such, we are working on a policy that will require such traders to declare the source of forex at ports of entry.”
He said Government would designate commercial banks where traders are free to open nostro accounts and access their forex from. The banks would then provide proof of withdrawal for use at the borders under a tracking system.
This naturally gives rise to concerns about smuggling and bribery but Chiduwa clarified to FinX that the system would be IT driven. “We are working towards the removal of the human face at all the ports of entry.” Anyone who does not comply with the requirement will forfeit his/her goods to the State.
“Government is committed to the use of the Zimbabwe dollar as the unit of exchange but if we check the movement of prices there is an indexation of prices against the exchange rate and this is pushing up inflation. This policy will eliminate the black market and help bring down inflation.” Implied annual inflation closed October on 440% and monthly inflation at 38.8%.
Overall, Finance Minister Mthuli Ncube remains assertive that inflation will be kept under check in the coming year to 2% at year end and that Government will be able to achieve a balanced budget.
“The forecast deficit is at 1.5% of GDP and even if we experience ‘bleeps’ here and there we will be able to achieve all of our targets,” Ncube told a post-budget briefing for the media.