The Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) recently announced that they had frozen the foreign currency bank accounts belonging to Harare City Council. The FIU said they had done this because the city council was violating laws by demanding that certain bills be paid exclusively in foreign currency. The FIU also accused the council of using parallel rates and causing instability in the markets. Recently the Harare City Council and several others revealed that they would continue to bill exclusively in foreign currency for certain services in order for the City Council to be able to raise enough funds to provide essential services such as refuse collection.
We have frozen the Harare City Council US dollar accounts. In terms of the law, they are expected to allow the public to pay in either currencies, but they are having a practice where they are insisting on US dollar payments without the option of paying in Zimbabwe dollars for some services. We have been engaging them, to bring them to order.
So we are going to be targeting public entities, not only those refusing to accept the local currency for certain services, but also businesses that are charging using parallel market rates. There’s no excuse for anyone, especially public institutions.
Back at the start of August, the Ministry of Finance issued a directive freezing most expenditures at various ministries resulting in a fall in black market exchange rates. The Finance Ministry accused other ministries of causing rate spikes by using parallel rates when producing their quotes. There was therefore every chance that the Harare City Council’s directive on foreign currency bills would cause consternation in the halls of the national government. In fact there were warned last week that something like this would happen.