THE Reserve Bank of Zimbabwe (RBZ) said yesterday individuals and corporates externalised about $1.8 billion last year, a situation which is not sustainable and requires urgent remedial action.
RBZ governor John Mangudya made the startling revelations as he announced a raft of measures in the first quarter monetary policy statement aimed at plugging continued illicit financials flow to aid economic recovery.
Mangudya said lack of self-discipline, trust, transparency and accountability are ills that were fuelling leakages and economic sabotage.
“This economy needs to be transformed through efficient utilisation of resources which requires high levels of transparency and accountability,” he said.
He said money was flowing out of the country more than was coming in, a move worsened by disruptive practices by regional business pursuing the green back in Zimbabwe’s dollarised economy.
He said local corporates externalised $1.2 billion last year through highly inflated management fees, technical and professional fees among others while individuals leaked $684 million through fake “donations” to their own accounts outside the country.
“Such funds leave Zimbabwe without circulating in the economy, resulting in low multiplier effect and low aggregate demand,” the RBZ governor said.
“We’re exporting liquidity. We need as a nation to put a stop to this behaviour.”
Mangudya said Zimbabwe could only go through transformation if the leakages were addressed.
He said to plug the leakages, the RBZ was scratching use of the “free funds” concept by corporates which had been carried over from the Zimbabwe dollar era.
“The concept of free funds has become a fertile breeding ground for illicit financial flows,” the central bank boss said.
All offshore investment will with immediate effect require central bank approval while corporates are now obligated to give banks a day’s notice for cash withdrawals of more than $10,000.
“All suspicious transactions should now be reported to the RBZ before processing of the outgoing transactions by financial institutions,” Mangudya said, warning that financial institutions that failed to report suspicious transactions would be charged in terms of the Money Laundering and Proceeds of Crime Act.
As part of measures to improve liquidity, the central bank directed banks to buy all other currencies that are part of the nine in the multi-currency basket for onward selling to the RBZ.
The central bank also reviewed upwards the single investor limit on the Zimbabwe Stock Exchange to 15 percent from 10 percent per counter as well as the foreign investor threshold to 49 percent from the current 40 percent to increase foreign investor participation on the bourse.
An upgrade of the RTGS platform to cater for all currencies in the multi-currency basket was also underway, the RBZ said.
The central bank also scrapped levying of administrative charges on savings accounts by banks to encourage saving and use of banking systems. —New Ziana.