Forget the so-called World Bank along Bulawayo’s Fort Street or Road Port in Harare, Zimbabwe’s infamous illegal cash dealers have gone high tech.
BY BUSINESS REPORTER
The two places were notorious for illegal foreign currency dealers that lined up the streets during one of Zimbabwe’s worst cash crisis between 2008 and 2009.
Seven years after dollarisation, Zimbabweans are once again resorting to illegal currency deals to survive, but this time they would not have to take the risk of going to the streets to buy the much sought-after United States dollar — thanks to technology.
A number of groups have emerged on WhatsApp where currency sellers and buyers strike deals on a daily basis.
Investigations by Standardbusiness revealed that in most cases, people behind these groups had connections with bank employees with access to cash and they took advantage of the Real Time Gross Settlement (RTGS) payment system.
One such group is Greenway Traders Inc, which uses a bank account at one of the largest commercial banks with links to the state.
Buyers transfer money to the account using RTGS and they can get up to $1 000 in cash. The bank only allows its customers to withdraw $100 a day due to the cash shortages in the country.
The dealers behind Greenway have also opened an offshoot group known as Business Centre, an indication of the success of the scheme.
However, Business Centre members are more discreet compared to those on the Greenway group. Both groups charge an average of 10% of the amount of cash involved in the transaction. This means that $1 costs 10 cents on the parallel market.
Business Centre has 191 members. John Robertson, a renowned economist, said the emergence of a parallel currency market did not come as a surprise.
“It [cash shortages] is an opportunity for people who are prepared to take up the risks of doing this,” he said.
“All of this is of enormous worry to the country because it should not be possible to make money by these means.
“The fact that it is possible to make money through these means shows a level of desperation.
“The level of innovation by some people who say we can turn a bad situation into opportunity, which we can profit from, is striking.
“It is a tragedy that people can profit from a bad thing.”
Harare based economist Prosper Chitambara said the parallel market was a natural product of cash shortages.
“When you look at any of the countries that have gone through scarcities, not just of cash, but of goods, what tends to happen is that there will be a parallel market created by speculators,” he said.
“These speculators will be taking advantage of not just cash but even of commodities by selling them at a premium.
“This could be a cartel of a group of people with ready access to cash because they know someone who works in a bank.
“Obviously, they cannot just be one person. It has to be a cartel of people who have links within the financial system.”
Some retailers have been accused of being suppliers of the cash that finds its way into the black market and Confederation of Zimbabwe Retailers president Denford Mutashu said it was important to report such deals to the Reserve Bank of Zimbabwe (RBZ).
“I have not seen any retailer or wholesaler who is selling cash and if they are there as your sources say, the law must take its course,” he said.
RBZ governor John Mangudya said Zimbabweans risked losing their hard-earned money to unscrupulous traders by putting their trust in an informal system.
“Our advice to people is that they should not be duped to sell their foreign currency [to illegal dealers],” he said. “The demand for foreign currency is higher than the supply and people should not be duped by unscrupulous businesspeople.”
The RBZ is preparing for the introduction of bond notes to address the cash shortages, but economists warn the surrogate currency would resurrect the black market because Zimbabweans have no confidence in the central bank.
The bond notes would be at par with the United States dollar and the RBZ has been at pains to explain that their introduction would not mark the end of the multi-currency regime that was adopted in 2009.