Informal sector to approach Bureau de change for forex

by Zivanai Dhewa

The informal sector and the Small to Medium Scale Enterprises should approach Bureau de change for their foreign currency exchange instead of black market with rates that contribute to high pricing of goods in retail shops. 

This was said this morning by the Director of Communication and Advocacy in the Ministry of Finance and Economic Development, Clive Mphambela while explaining the importance of the Intermediated Money Transfer Tax on the fiscus (IMTT) during a post-mortem webinar meeting of the Mid-Term fiscal policy, running under the theme “gearing for higher productivity, growth and job creation.

“What we see in the economy is that it is a highly informal market and the Intermediated Money Transfer Tax (IMTT), if you recall was a way of bringing everybody to the table in terms of contributing to the Fiscus.

“The IMTT is a major contributor to the revenue when we do the numbers in terms of ZIMRA collection, it is a significant contributor to budget performance, and it is providing the resources that we are pushing towards the social safety nets,” said Mphambela.

Mr Mphambela explained on the limited access of the SMES to the auction market. 

“Concerning the limited access of the SMEs sector to the auction market, I think the rule book was very clear when the Reserve Bank announced the auction, the SMEs should access the auction via the authorised dealer networks which comprise the Banks and the Bureau de Change, there is a key role those institutions should play in terms of aggregating the requirements from the smaller players. Obviously the Central Bank is not a retail bank and it will be very problematic to have thousands upon thousands with small bids in the auction.

“We have seen one or two Bureau de Change coming to participate in the auction and incidentally these were coming to offload foreign currency that they would have mobilised on the market, and that system to me suggests that the system is actually working so the reverse should also be true, but I think what is also happening is that in between auction, the authorised dealer networks should also be available to do trade at the Bid Rate around the rate that would have been allowed by the Central Bank,” he said

In his final presentation Mr Mphambela concluded by addressing a question on the impact of closure of Ecocash on SME operations.

 “I think we need to put it into context and say that Ecocash platform is not closed, it’s really certain aspects of it that were destabilising and those are the ones that are subjects of enquiry in the ongoing investigation,” he said.

He added : “For the generality of transactions, bonafide person to person, bonafide person to business payments, those are working very well, it is the shadow banking element with the Ecocash platform which was problematic, those are the  connections that have been temporarily disabled until the enquiries are completed.”