Foreign currency scam at RBZ confirms illegal deals on black market

By Tererai Karimakwenda
09 August, 2007

Foreign currency dealers and economic experts have always claimed that the biggest buyer of foreign currency on the black market was the Reserve Bank of Zimbabwe (RBZ). But because the bank uses individuals who have no formal ties to it, there has never been any real proof of the illegal forex deals. That is until this week, when The Zimbabwean newspaper reported that a division head at the RBZ had been suspended over a foreign currency scandal that is believed to have prejudiced the country’s central bank out of billions of dollars and exposed it as the key player in illegal foreign currency deals.

According to The Zimbabwean, RBZ Governor Gideon Gono last week suspended Mirirai Chiremba, head of the Financial Intelligence Division and a former operative with the Central Intelligence Organisation, after it was discovered he was misrepresenting the exchange rates he paid to the black market dealers. Chiremba allegedly inflated the rates at which he purchased the forex, and made huge sums for himself from each transaction. Wilf Mbanga, publisher of The Zimbabwean, said the RBZ was mopping up all the forex in the country, using people not associated with the bank in any way. No receipts or paperwork were processed to represent these deals. The RBZ chef trusted Chiremba.

Mbanga said Gono became suspicious because Chiremba kept providing exchange rates that were not correct, so he put a trail on him. And this is how the whole scandal unravelled. Gono suspended Chiremba for two weeks without pay. Mbanga finds that fact that Chiremba was not dismissed or formally charged rather suspicious. He said if the RBZ was defrauded the police should be involved. He believes that this case is very important because it is the first time there has been evidence linking the central bank directly to black market forex deals.

Mbanga said other government institutions and parastatals are also illegally mopping up foreign currency. He pointed to the Revenue Authority which is insisting that Zimbabweans who import vehicles pay duty fees in forex. “I believe this is illegal,” Mbanga said and he also referred to Air Zimbabwe, which often charges part of their airfares in forex. He said Zimbabwean currency should be used to pay for goods and services in Zimbabwe.