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THE incident of two Rwandese caught attempting to smuggle $87 450 cash out of the country at the Harare International Airport on June 5 should serve as a huge red flag for the Reserve Bank of Zimbabwe and law enforcement authorities.

It has been stated on record that Zimbabwe has porous borders with goods being smuggled in at high rates. There are also many cases of illegal immigrants coming into the country through various points.

The security forces should therefore look beyond the airport to official and unofficial exit points around the country’s borders. The same routes that are used to smuggle goods in can be used to get cash out.

The question of who is siphoning cash out of Zimbabwe is not one that can be answered with a simple singular word describing one demographic group or the other. There are many leaks and the central bank obviously needs to look at the informal sector a bit more closely.

Reports have placed the informal sector economy at around $7 billion. Even if this figure was overstated by 100 percent, this is still too much money to be floating around. Obviously it provides a tempting option for people looking to get hard currency out of the country and the central bank must move in to close the potential leaks immediately.

Many people get emotional when the phrase informal sector is mentioned in the same sentence with words like tax and legislation. But what the central bank and other policy shapers need to consider is just what defines the informal sector. Is it really about the vendor selling wares on the pavement? Would even a million vendors with a capital of less than $200 each on average account for the figure of $7 billion?

Authorities need to look at the many small shops in the Harare CBD and at places like Mbare Musika. Of particular interest is the area bounded by Robert Mugabe Street and Kenneth Kaunda Avenue stretching from Joshua Nkomo Street all the way down to Cameroon Street leading out to Mbare.

Many of the shops in the area display their municipal and health licences, but do not issue out receipts to show tax compliance. They also do not have POS machines and want hard cash.

Therefore their tills are simply temporary cash caches as there is no paperwork involved. This is possibly where a considerable amount of the money bleeding out of the official system is going.

Zimbabwe’s dollar economy has attracted many people who simply look for a niche to buy and sell or offer a service like hairdressing then collect their mark-up in US dollars. When they convert their profits to a weaker currency, they become rich overnight. It is logical to conclude that this money is not being spent in this country. Zimbabwe has become an open source of US dollars for all.

And it is the ordinary citizen who is siphoning money out of the official system to give it to those externalising our wealth. A person who has spent hours queueing in the bank wants their dollar to go as far as possible. So they will go and spend their money at the cheapest place.

This happens to be the small shops operating as sole traders downtown which offer basic provisions at far much cheaper prices than the genuine retailers who pay taxes, proper wages and salaries as well as other overheads. Chances are some of the shady shops are selling smuggled goods so do not even pay duty, making their prices very competitive.

With the announcement of the pending bond notes later this year, many of these fly-by-night entrepreneurs are obviously running scared. They will be looking at mopping up what they can and getting it out of the country. Responsible authorities must act urgently to stop further bleeding of the economy.