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Beaven Dhliwayo Features Writer

It has always been a conspiracy theory that a secret group of people is making the black market flourish while manipulating the local currency, and this may well be true.

Last week the country heaved a collective sigh of relief when news spread that the Reserve Bank of Zimbabwe’s (RBZ) Financial Intelligent Unit (FIU) was freezing accounts of companies suspected to have been involved in manipulating the local currency.

The entities are Sakunda Holdings, Spartan Security and Croco Motors. FIU further froze accounts of Bill Height Investments (Private) Limited, Landela Investments, Rimosa Trading (Private) Limited, Fossil Agro (Pvt) Ltd and Traverze Travel (Pvt) Ltd.

FIU reportedly gathered information that the identified rogue companies were pouring in over $1 billion into the parallel market to mop up United State dollars.

Recently the exchange rate shot up from USD$1:16 to US$1:23 for EcoCash and US$1:25 for electronic transfers.

Businesses were left with no choice but to also chase the parallel market when pricing their goods and services, thus eroding salaries of Zimbabweans at a time the economy is underperforming.

It is also reported that some companies, especially in the manufacturing sector, were contemplating downing tools as the local currency lost value against the United States dollar last week and earlier this week.

Money laundering has been a global phenomenon, which undermines the economic and political stabilities of states. Over the past few years it has been apparent that Zimbabwe has been exposed and become vulnerable to its exploits.

Money laundering by greedy and manipulative individuals has impacted negatively on economic development, financial stability never mind political development of the country.

Government, through the central bank, should keep pressing hard and deal with the culprits other than only freezing their accounts.

In simple economics, when an account is frozen, account holders cannot make any withdrawals, purchases, or transfers, but they may be able to continue to make deposits and make transfers into it.

Put bluntly, a consumer can put money into an account, but cannot take it out. There is no time limit as to how long an account may be frozen.

But Zimbabweans who have been suffering at the expense of these few greedy individuals hope for deterrent penalties.

Being in control of the parallel market, the cartel had been literally siphoning cash from every Zimbabwean as they determine the exchange rates.

Exchange rates on the parallel market affect any other transaction, including the EcoCash cash-out platform, which was very convenient when it was rolled out some years back.

Now EcoCash is a cash cow, milking unsuspecting individuals of their hard-earned money by way of charging higher premiums when they cash out from agents.

What is becoming clear is that the agents are being used by the same cartels, who are controlling the parallel market, and Econet Wireless Zimbabwe is clean on this one.

Recently ordinary Zimbabweans raised the red flag over excessive premiums charged by EcoCash agents when withdrawing cash arguing that it is unlawful as it wipes out their salaries.

The Zimbabwe Anti-Corruption Commission (ZACC) should buckle up and intensify their investigations on EcoCash agents, who seem to be now working hand-in-glove with the cartels to mop up United States dollars in the economy.

The RBZ should also move with haste to increase cash in circulation, since all these shenanigans are possible because there is not enough cash in circulation

At this point and time, no one knows where the greenback is being stashed, raising high suspicion of illicit financial flows (IFFs) at play in the country.

Government should not tire, but continue complementing monetary policy changes with an anti-corruption tactic to put a leash on IFFs as the country is losing billions annually.

IFFs are seen to be spiralling this year owing to the buying and selling of cash openly on the streets of Harare and elsewhere in the same way tomatoes are being sold. This is unacceptable. How can money be sold on the streets?

IFFs are illegal movements of money or capital from one country to another with Global Financial Integrity (GFI) classifying it as a movement when funds are illegally earned, transferred, or utilised across an international border.

One of the major problems fuelling IFFs according to Transparency International Zimbabwe (TIZ) is the absence of a solid plan that synchronises reforms.

It is to this end that the country needs a national anti-corruption strategy to coordinate various governance reforms aimed at curbing corruption and IFFs.

FIU should use the powers vested in them and desist from sleeping on the job. Last year, the Government gazetted the Money Laundering and Proceeds of Crime (Amendment) Bill, which seeks to strengthen the FIU by giving it autonomous powers to effectively combat the crime.

The country now needs to see action, and if the people on the job seem captured by the Guptas of Zimbabwe then there is need for its restructuring to give way to competent people willing to fight corruption and IFFs.

On the other hand, the country’s police force needs to change their attitude, and help curb corruption and IFFs, which is the real problem the country is facing right now.

What pains is that the police are ever-present in cities chasing vendors and kombis, leaving money changers and errant EcoCash agents to trade at peace without any fear of arrest.

This scenario has pushed many to develop some conspiracy theories that bigwigs are running the black market.

This phenomenon of money laundering, among other economic and financial crimes, has had better success in infiltrating into the economic and political structures of most developing countries, resulting in economic digression and political instability.

Although Government has responded and continues to respond, through legislative measures, to the menace of money laundering, cartels have exploited the lax regulatory environment and vulnerable financial systems.

Money laundering has over the years helped cartels to stay in business with the assistance of certain financial institutions, simply because some of these organisations are in one way or other benefiting from the illegal trade.

Investigations need to be done, as some local banks are seen to be enjoying super profits out of sync  with their legal investment, which sometimes makes people wonder how these institutions are operating.

If Zimbabwe’s economy is to grow, banks must be closely monitored.