FIU freezes council bank accounts
LIVINGSTONE MARUFU
The Financial Intelligence Unit (FIU) has frozen the Masvingo City Council’s bank accounts as a result of the local authority ‘s refusal to accept the Zimbabwe Gold (ZWG) for a number of transactions, Business Times can report.
The latest development was confirmed by Oliver Chiperesa, the director general of the FIU.
He added that FIU was now targeting more local authorities.
“We want to advise you that we have frozen the bank accounts of Masvingo City Council for refusing to accept ZWG for certain services.
“We will be investigating them for currency manipulation and violation of the Exchange Control Act and the Bank Use Promotion Act,” Chiperesa said.
He added: “We had previously engaged them following a number of complaints by their clients and they assured us they would comply.
“But we have continued to receive those complaints.We are going to get tough with local authorities because a number of them engage in this practice whereby certain services, for example, plan approvals, licence fees and other services are paid for only in US$. We find this unacceptable especially for public institutions that should be at the forefront of promoting use of the country’s currency,” he added.
In order for FIU to respond quickly, it requests that the public report any similar incidents they may have had with other local agencies by calling one of its hotline numbers.
FIU used to release the identities of exchange rate manipulators and it is considering starting up again soon.
“It’s about time we start naming and shaming some of these saboteurs, especially if they are public institutions,” Chiperesa said.
He said the unit is still monitoring the suppliers and manufacturers countrywide who are rejecting or hiking ZWG prices fearing that this could trigger price instability and exchange rate volatility.
This week, retailers have marginally hiked prices in both US$ and ZWG with bread increasing to US$1.05 per loaf from US$1 and a two litre cooking oil bottle selling at US$3.40 from US$3.20 previous weeks.
“We have noted a marginal change in prices in many retail shops but we want to monitor if this is because of suppliers and manufacturers who have hiked due to increase in prices of cost of production or these are retailers who are profiteering. We are not doing price controls but we want the ZWG prices to align with the US$ prices, using the recommended interbank rate,” Chiperesa said.
He said cumulatively over 600 accounts were frozen, close to 200 were penalised.
Businesses have previously claimed that the manufacturers were only charging prices that allowed them to keep on producing.
Manufacturers said their prices are set at the level that enables them to stay in business.
Firms have previously accused the FIU of harassing struggling companies to impose “price controls”.
