Zimbabwe’s Finance Minister Mthuli Ncube.

HARARE– The Zimbabwean government is now going after its service providers and suppliers of other goods, some of whom it accuses of channeling funds they receive from the government to the parallel market where they buy foreign currency.

The government pays its suppliers in local currency at the prevailing auction rate, but some suppliers are alleged to be rushing to the black market to offload the Zimbabwean dollars, especially the United States dollars. 

Where it is established that payments have been directed to the parallel market, the culprits will be punished heavily, a statement issued by Finance and Economic Development Minister Mthuli Ncube, dated July 18, said. 

“Government has noted with great concern that some suppliers who supply goods and services to government institutions are channeling the funds they receive to the illegal foreign exchange market, thereby contributing to exchange rate and price instability,” Ncube said.

Zimbabweans continue to suffer from continuous price increases as retailers and other suppliers of goods and services peg the prices against the runaway black market rates. 

Ncube said the government had directed the Financial Intelligence Unit of the Reserve Bank of Zimbabwe to follow up and scrutinize all payments made to government suppliers to establish how the funds had been used. 

“Where it is determined that funds were channeled to the illegal foreign exchange market, the bank accounts involved will be frozen indefinitely pending criminal investigations and prosecution of the companies concerned and their directors and officers,” Ncube said. 

“Proceeds from the illegal transactions will be forfeited to the state in terms of the Money Laundering and Proceeds of Crime Act (and) the suppliers concerned, their directors and related companies will be blacklisted with the Procurement and Regulatory Authority of Zimbabwe and will be banned from participating in any government tenders,” he said. 

He added that in addition to the measures, the government would scrutinize all awarded tenders to ensure that it was getting full and fair value.- Xinhua