Zimbabwe News and Internet Radio

Chiwenga lashes ‘financial terrorists’

Vice President Constantino Chiwenga has lashed out at corporates that are dipping their hands in underhand parallel market exchange dealings and equated such behaviour to “financial terrorism”.

Vice President Constantino Chiwenga
Vice President Constantino Chiwenga

Addressing captains of industry and commerce at the 13th Zimbabwe International Business Conference in Bulawayo, VP Chiwenga said that Government was sharpening its policies to thoroughly deal with the culprits.

“I want to give a stern warning to those practicing financial terrorism in the country. We will react accordingly as Government and nobody should claim that they were not warned.

We’ll take very strict measures. As responsible and patriotic citizens, we should ask ourselves whether our actions are in the best long term interests of the nation?”

“The market-based framework for the determination of the exchange rate is expected to facilitate financial sector stability, contain inflationary pressures and build public confidence.

“These objectives will not be attained if individuals and corporates continue to sustain the parallel market through their underground activities,” said Chiwenga.

“What we’re doing will work and what the financial terrorists are doing won’t work. The rising inflation, which we’re now experiencing hurts the whole economy and its development prospects. The trend is as a result negatively affecting all of us.

“It’s now time we engage and openly discuss why as a nation we continue to experience foreign currency shortages yet our foreign currency earnings exceed those of other countries that are not experiencing the same phenomenon,” said VP Chiwenga.

Zimbabwe ditched its own currency for the U.S. dollar and other currencies in 2009, after hyperinflation reached 500 billion percent the previous year.

In February, faced with acute shortages of U.S. dollars, Zimbabwe introduced a new currency, called the Real Time Gross Settlement dollar. The RTGS has been losing value ever since, forcing companies to increase prices.

Year-on-year inflation raced to 66.8 percent in March, up from 59.39 the previous month, according to statistics agency Zimstats.

Last week the RTGS dollar was trading at 3.19 to the dollar on the interbank market and 5 on the black market. That means a loaf of bread costs about 70 U.S. cents a loaf, in a country where the average income is around $4 a day.