Gono threatens fresh crackdown on forex dealers

Gono threatens fresh crackdown on forex dealers

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By Agencies

ZIMBABWE'S central bank threatened on Tuesday to crack down on a resurgence in the black market for scarce foreign cash, saying officials would strictly enforce the country's stringent laws on currency exchange.

The government has already begun "closer surveillance" of currency dealers, and a special committee will soon start randomly inspecting money changers and businesses suspected of dealing on the black market, said central bank governor Gideon Gono.

"There will be swift prosecution and hefty penalties. We are catching up," he said.

Those found guilty of black market money trading face fines and jail time.

Already, several businessmen have reportedly been charged for black market money dealing, and at least six top bank and finance executives are believed to have fled the country, fearing arrest.

Zimbabwe has been wracked by political violence and economic turmoil in recent years as President Robert Mugabe's government has seized thousands of white-owned farms for redistribution to blacks.

Seeking to crack down on dissent, the government has arrested opposition leaders, trade unionists and independent journalists.

The farm seizures have disrupted the country's agriculture-based economy, leading to acute shortages of food, gasoline, medicines and other essential goods.

Whistle blowers

Annual inflation has skyrocketed to around 400%, and hard currency - needed to buy imports from abroad - is running short.

The government has been auctioning hard currency, like US dollars, at around a rate of Z$5 300 to US$1 - an artificially low exchange rate.

Black market dealers, in contrast, offers Z$6 700 for US$1, and there has recently been a resurgence in illicit money trading, Gono said.

"Clearly, Zimbabweans continue to be innovative in these selfish practices," Gono told a meeting of bankers, business leaders and state officials.

Gono encouraged "whistle blowers" to report employers or colleagues in return for a percentage of hard currency recovered.

Some businessmen have already confessed to buying hard currency on the black market and requested amnesty, saying they turned to black market dealers because they had failed to buy at auction the cash needed to keep their businesses running.

While the bank is not empowered to grant pardons, Gono said bank officials would push courts to levy fines - and not send to prison - those who "voluntary confessions".
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