HomeBusiness DigestTelecel faces forex crunch

Telecel faces forex crunch

Godfrey Marawanyika

TELECEL Zimbabwe Ltdis battling to access foreign currency through the auction floor system because its currency declaration (CD1) forms are yet to be cleared by the Reserve Bank of Zimba

bwe (RBZ).


The latest development comes amidst speculation that the company has not been receiving foreign currency because of the arrest of its chairman, James Makamba, on charges of externalising funds.


Telecel management, however, dispute this.


The auction floor system was introduced by the RBZ on January 12 to try and facilitate easier access of foreign currency by industrialists.


Insiders said failure to access foreign currency on the auction floors had affected Telecel’s expansion programme and the replacement of Sim cards.

The company is, however, expecting replacement Sim cards sometime during the middle of this month.


Telecel managing director Anthony Carter told businessdigest this week that the company had been battling to access foreign currency for some time but had failed to do so largely because of administrative problems.

“We have not been getting foreign currency over the past few weeks but this is because of an administrative issue concerning the clearance of CD1 forms from the authorities,” Carter said.


“We cannot disclose the amount we are looking for because that is a confidential issue. All CD1 forms have to be cleared first before we get foreign currency. It’s not just our problem but this includes everybody. Right now we have some equipment which has been taken for maintenance and this again needs clearance using the CD1 forms.”


Carter admitted that some of the money they were seeking via the auction would be used in their expansion drive.


He, however, refused to say how much was needed and the name of the supplier of the equipment citing confidentiality.


Commenting on the eff-ect of Makamba’s arrest, he said that “certainly that is not an issue. Generally up until a few weeks ago we have been receiving forex via the auction. That is just mere speculation.”


Telecel was in April fined $374,2 million and found guilty of illegally dealing in foreign currency by the courts.


The company was convicted on its own plea of guilty by magistrate Virginia Sithole on three counts of illegally dealing in foreign currency amounting to US$1,3 million, R1,3 million and more than £22 000.


Exchange control regulations lay down mandatory penalty fines equivalent to the currency involved unless the court finds special circumstances.

Hardest hit by the failure to access foreign currency is the company’s roll-out programme which sought to increase the subscriber base to 120 000 by the end of December.


Carter said he was, however, optimistic that once the foreign currency was secured the company would be able to increase its subscriber base.


The central bank is now tightening its foreign currency distribution system as all importers and exporters will now be issued with Input Tracking Code numbers.


The facility allows the central bank to track all auction-related documents, including foreign exchange bidding forms, invoices and documents of entry of imported goods.


Although Makamba has so far repatriated some money amounting to £9 047,56 and was granted a $50 million bail by the High Court he is still in custody because the Attorney-General’s office appealed against granting bail to the Supreme Court.

Recent Posts

Stories you will enjoy

Recommended reading