Finance

Illegal money changers now Zimbabwe’s optional purse

By Jeffrey Moyo

Earning a monthly wage of $250, 38-year-old Shylet Rukweza has always wanted all her money at once as her landlord demands a cash payment of 150 dollars for her monthly accommodation rent.

Despite the cash shortages, Rukweza’s predicament is weighing down on this southern African nation, where banks limit weekly withdrawal of cash to as little as $50 amid the country’s deepening liquidity crisis.

But she (Rukweza), a single mother of one, has been quick to find a solution with the country’s rising illegal currency traders dotting street pavements across towns and cities.

The currency dealers with direct links to officials in the banks, where they easily withdraw hard cash through underhand dealings, charge her 15 percent interest for giving her the money she earns at a restaurant in the Zimbabwean capital, Harare.

In return, Rukweza transfers her entire wage to currency dealers’ bank accounts after getting cash from them.

This means Rukweza has to part with close to $40 each month before she pays her rent.

“I’m pained, but I have no choice because I need hard cash. I use public transport and I have to pay rent using hard cash and my child boards a bus to and from school paying bus fare with cash,” Rukweza told Anadolu Agency.

“So you can see, as long as banks make it hard for people like me to get money, illegal currency dealers will always milk us,” she added.

In 2006 to 2008, illegal foreign currency dealers in Zimbabwe became a force to reckon with at a time the local currency lost its value to ballooning inflation.

In 2009, they (the foreign currency dealers) also lost their luster at the advent of the US dollar.

But typical die-hard as they are, Zimbabwe’s illegal currency dealers last year resurfaced after government introduced bond notes targeting to curtail incessant liquidity crunch in banks amid rife foreign currency externalization.

Bond notes are Zimbabwe’s currency of notes, whose value is backed by a $200 million Africa Export Import Bank (AFREXIM) loan facility, and government introduced them (bond notes) to stop the rife externalization of the US dollars.

In May last year, Zimbabwean President Robert Mugabe side-stepped parliament to issue a decree paving the way for the introduction of bond notes using his presidential powers to amend the country’s Central Bank Act, designating bond notes as legal tender pegged at par with the U.S. dollar.

However, the liquidity woes have remained indefatigable.

Rather, the woes have given a lifeline to many roadside currency dealers like 43-year old Andrew Saunyama operating from Copacabana, a popular bus terminus in the Zimbabwean capital Harare.

“We are back in business; when depositors can’t access their money in banks, we can do the job for them, especially those that need huge sums; we charge 15 percent interest. Our connections in banks provides us cash equivalent to any amount transferred into our accounts by desperate depositors in search of cash,” Saunyama told Anadolu Agency.

As cash woes mount, economists have pinned the blame on the shortage of both the U.S. dollars and the country’s bond notes.

The bond notes are pegged at par with the US currency.

“Where there is a shortage of anything, be it US dollars or bond notes like in Zimbabwe’s case, it means there is rising demand for money and therefore illegal currency dealers prey on desperate depositors struggling to access their moneys lying in banks and sell them the cash at an interest,” independent economist, Kingston Nyakurukwa, told Anadolu Agency.

And illegal money changers gain tract at a time Zimbabwe’s banks stand accused of fuelling illicit financial dealings with currency dealers capitalizing on depositors, who are restricted to withdraw as much as $50 weekly, thanks to the shortage of hard cash in the economy.

Earlier this month, a branch manager at a local commercial bank was caught red-handed in underhand currency trading at one of the bank’s branches in the Zimbabwean capital Harare. The bank manager allegedly traded US dollars with illegal currency dealers.

Even business people agree that they have found alternative sources of quick money in the form of illegal currency dealers.

“I am into buying and selling Japanese second hand cars which I get in Messina in South Africa, where I have to pay cash for the cars. For this kind of business, I can’t get the huge sums of money at my bank and so I turn to illegal money changers, who have established links with bank tellers. Yes, we have to pay handsomely to get the cash,” Ray Utete, a Zimbabwean indigenous car dealer, told AA.

Despite depositors like Utete, who is bearing the brunt of paying more to gain access to their own money, Zimbabwe’s cash crisis means heydays for many illegal currency dealers like 43-year old Merrylin Sithole.

“It’s our time to shine; just for giving someone hard cash and getting my money at an interest of 10 to 15 percent moved into my bank account through my links at banks, whom I also give something,” Sithole told Anadolu Agency.

“I am definitely not abusing anyone. I am a businessperson, assisting bank depositors to have immediate access to their money which takes them ages to get from their banks using usual banking procedures,” added Sithole.


Notice: Trying to get property of non-object in /home/gatewayturkey/public_html/wp-content/themes/flex-mag/functions.php on line 2149
Click to comment
To Top