Debra Matabvu, Harare Bureau
Individuals and companies in Zimbabwe could soon be allowed to keep no more than US$10 000 in cash to boost liquidity and embrace international banking practices.
The Bank Use Promotion Act and related anti-money laundering laws are already being fine-tuned to bring these and other measures into force.
Our Harare Bureau understands that the Reserve Bank of Zimbabwe has drafted the proposal and now awaits further direction from State principals.
Under the envisaged dispensation, individuals and businesses will hold US$10 000 and below at any given time without questions asked, with any surplus subject to immediate banking.
Companies will still be required to deposit daily takings at the close of business.
Presently, the Bank Use Promotion Act does not impose a maximum quantum on cash in hand.
In an interview with our Harare Bureau last week, RBZ Governor Dr John Mangudya said, “At the moment, there is no law regarding how much an individual can have in their possession, but that is what we are proposing. This is in line with best international practices around the globe.
“Once that money is brought back, we are confident cash will improve. We are saying individuals should not have money exceeding
US$10 000 in their possession at any given time. We want people, especially businesspeople, to develop a culture of banking, which will help with cash circulation.”
Dr Mangudya said the RBZ is stepping up efforts to get externalised funds back into the country, with repatriation modalities now complete.
“We want to conduct a simple and transparent exercise so that members of the public will respond positively to our call. We are going to distribute forms to all banks across the country starting this week, which individuals or companies will use during the exercise.
“The forms will help individuals and companies that would want to partake in the exercise, showing them how to go about the whole exercise. We want to instil confidence (in the market) so that everyone wishes to partake in the exercise.
“We are also calling upon those who legally expatriated money, or might have bought assets using that money, to declare the money and assets for financial transparency. The assets will be an investment to the country under the RBZ at the prevailing rate of 7 percent per annum.”
Zimbabwe has been grappling with cash shortages since 2016, with authorities citing massive cash hoarding, money-laundering and externalisation.
Statistics show that roughly US$3 billion was externalised between 2015 and 2017 to Mauritius, Botswana and the Far East.
It is believed that at least US$1,8 billion of the sum was illegally spirited away while the balance was expatriated via management, service and technical fees as well as royalties.
The RBZ estimates that on average, Zimbabwe lost US$150 million to illicit financial flows every month in 2015.
President Emmerson Mnangagwa extended a three-month moratorium for individuals and corporates that externalised funds or assets to repatriate them.