The Sunday News
Judith Phiri, Business Reporter
GOVERNMENT contractors who channel funds to the illegal foreign exchange market will be blacklisted from future contracts, have the proceeds of illegal transactions confiscated, their bank accounts frozen and prosecuted.
This comes as 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.
In a statement on Monday, Finance and Economic Development Minister Professor Mthuli Ncube said Government will, with immediate effect, implement the measures to curb this form of abuse of manipulating the exchange rate.
He said: “The Financial Intelligence Unit will follow up and scrutinise all payments made to Government suppliers, to establish how the funds have been utilised. 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.”
The Minister said the proceeds from the illegal transactions will be forfeited to the state in terms of the Money Laundering and Proceeds of Crime Act [Chapter9:24].
Prof Ncube said the suppliers concerned, their directors and related companies will be blacklisted with the Procurement and Regulatory Authority of Zimbabwe (PRAZ) and will be banned from participating in any government tenders.
“In addition to the above measures, Government is setting up a process to scrutinise all awarded tenders to ensure that Government is getting full and fair value,” added the Minister.
There have been reports that some major companies fulfilling Government contracts, especially with the infrastructure boom now in place, allegedly rush to the black market to buy foreign currency, boosting demand and so fueling exchange rate instability and price increases as others latch onto those rates.
Government last month announced that it will pay half of work done by road contractors and others with infrastructure contracts in US dollars while the other half will be paid in local currency with payments spread as part of measures to contain the exchange rate and price spirals.
