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Opposition leader sues RBZ over forex

The Reserve Bank of Zimbabwe (RBZ) has recently come under fire for its failure to provide ordinary citizens with access to foreign currency through legal channels.

This issue has far-reaching consequences for Zimbabwean citizens who depend on foreign currency to pay for essential needs such as passports, petrol, and rentals.

Prior to the crackdown on illegal money changers, ordinary citizens who earned their salaries in the Zimbabwe Gold (ZiG) currency had been turning to the parallel market to fulfill their foreign currency needs. However, the situation took a negative turn as a number of suspected forex dealers and ordinary Zimbabweans were arrested while conducting transactions on the streets.

Also Read: RBZ Partners Homelink to End ZiG Cash Shortages

In response to these developments, political activist Linda Tsungirirai Masarira filed an urgent High Court application to challenge the RBZ’s failure to provide an alternative platform for Zimbabweans to access foreign currency. Masarira emphasized that the arrests of citizens engaged in forex transactions cannot be justified as long as the RBZ does not offer a legal avenue for obtaining foreign currency.

Masarira urged the RBZ to revise the regulatory framework to enable the public to access foreign currency easily and without fear of criminalization, especially since informal markets are now considered illegal.

“The government agencies have been the biggest culprit demanding payment exclusively in forex notwithstanding its dereliction of duty in availing sufficient forex.

“The existing legal framework in respect of the trading of foreign currency needs to be broadened to enable the general public to purchase forex with relative ease and convenience.”

She highlighted how the lack of legal access to foreign currency directly impacts ordinary citizens, particularly in a country like Zimbabwe which operates under a multi-currency system. Furthermore, Masarira pointed out that essential goods and services such as passports are exclusively priced in foreign currency, exacerbating the challenges faced by citizens in accessing the required funds.

The activist emphasized that the current limitations on accessing foreign currency have a real and detrimental impact on the daily lives of Zimbabweans. With the exclusive pricing of certain goods and services in foreign currency, the necessity of having access to foreign currency becomes even more critical for ordinary citizens, making the lack of alternative platforms for accessing forex even more pressing.

“My obligations have been largely monetised in United States dollars. Pursuant to the multi-currency regime and some goods and services such as passports, vehicle import duty and fuel are exclusively sold in foreign currency,” Masarira submitted in her application where she cited the RBZ as the respondent.

She said the current legal framework infringed upon her right and that of other citizens to access foreign currency.

“The respondent [RBZ] has failed to ensure that forex is available in banks. Until recently, only a handful of elites could purchase forex at the Dutch auction system which was launched on 23 June 2020. There was no provision for ordinary citizens like myself to purchase forex,” she said.

“While the respondent prioritises access to forex by importers with verifiable foreign invoices, as indicated in the 2024 Monetary Policy Statement, little consideration was given to individuals like myself who require smaller amounts of forex for everyday purchases.”

Authorities recently introduced the ZiG, but maintained the multi-currency system.

“I aver that the respondent can enhance the public’s access to foreign currency by expanding the willing-buyer-willing-seller trading management it adopted following the discontinuation of the Foreign Exchange Auction System in April 2024,” Masarira said.

“In terms of the exchange control directive 8256/2024, authorised dealers (banks} and bureaux de change shall purchase foreign currency from willing sellers at a market determined exchange rate for onward sale to willing buyers.

“I submit that it must be broadened and extended to ordinary citizens like myself in need of forex for everyday purchases.”

She said the operational modalities of bureaux de change must also be expanded to enhance access to foreign currency by the public.

“In terms of the existing legal framework, bureaux de change are limited in terms of the persons and purposes they can sell foreign currency to and for,” she argued.

“At present they are only allowed to sell foreign currency to both natural and legal persons for purposes of funding international payments and other purposes as directed by the respondent.”

“There is no provision for the general public seeking to do domestic transactions in foreign currency, without receipts for external payments to buy forex from bureaux de change. This has effectively pushed the general public to source forex from informal channels.”

Masarira urged the RBZ to collaborate with telecommunications operators such as “EcoCash, Netcash and Telecash to facilitate easy access to forex by the public.”

“The respondent must remove the ban imposed on mobile money agents and partner them in such a way that they will act as bureaux de change and enhance public access to small amounts of forex for basic transactions,” she said.

The application is pending.

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