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End of era for forex dealers as Mugabe gets tough


GONO

By Loughty Dube/AFP/newzimbabwe.com staff
10/11/03

ILLEGAL foreign currency dealers stared a bleak future in Zimbabwe after an unprecedented police clampdown in the major cities of Harare and Bulawayo which coincided with the appointment of a new boss for the Reserve Bank.

Gideon Gono, the former chief executive of the Jewel Bank is now Reserve Bank governor and one of his key areas of focus is the illegal foreign currency market which has established a parallel financial market with inflated exchange rates in Zimbabwe.

Police launched a massive clampdown on the illegal trading in fuel and foreign currency raiding the homes and cars of suspected dealers and confiscating millions worth of foreign exchange in an operation that put hundreds of people behind bars and left city residents shell shocked.

In Bulawayo, riot police, supported by heavily armed police officers and detectives, first swooped on the Fort Street foreign exchange black market – popularly known as the ‘World Bank’ – and arrested dozens of illegal dealers before combing the main rural bus terminus near the city and taking into custody hundreds of suspects.

The government, facing critical foreign currency shortages, was also said to have deployed riot police in the capital Harare to stop illegal street dealing.

The government blames the crisis on a thriving parallel market for foreign currency, where the US dollar trades for more than seven times the official rate of 824 Zimbabwe dollars to one US.

Police and members of Zimbabwe's intelligence unit, the Central Intelligence Organisation, also set up roadblocks in all roads leading out of the second largest city of Bulawayo, strip-searching vehicles and confiscating any foreign currency or fuel they could find.

Police spokesman Smile Dube however could not shed any light on the motive for the clampdown saying divulging any information at this stage would jeopardise police operations. “The operation is a national exercise and commenting on it at this early stage will compromise the whole exercise but we will make information available later.” Dube said.

Eyewitnesses who spoke to reported some people being injured when illegal vendors at the bus terminus reacted angrily to the arrest of their colleagues and the confiscation of their goods.

“There were serious clashes when police confiscated some goods from vendors and forex dealers at the Renkini Bus Terminus when police swooped on anyone they suspected to be dealing in foreign exchange,” said a witness.

The police also arrested illegal fuel dealers and seized thousands of litres of both petrol and diesel. Zimbabwe is in the grip of a crippling fuel shortage and the government has recently allowed private companies to import the commodity. It is however still an offence to trade in fuel without licence.

A Zimbabwean motorist who said he was on his way to buy fuel in Botswana alleged that police had confiscated more than US$900 from him at a roadblock near Donnington Police Station. He said they told him that he would be refunded his money by the Zimbabwe Revenue Authority but in local currency.
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