IndependentProperty

RBZ calls in ‘law enforcement agents’

Ngoni Chanakira

THE acting governor of the Reserve Bank of Zimbabwe (RBZ) Charles Chikaura says the central bank is working with the ZRP and oth

er “law enforcement agents” to nab tycoons renting out their properties in foreign currency.


In Zimbabwe it is illegal to charge items using foreign currency. It is, however, permissible to peg items in foreign currency in which case the Zimbabwe dollar equivalent is payable.


Last week businessdigest revealed that thousands of landlords were requesting United States dollars for their designer properties in the plush northern suburbs of Highlands, Mt Pleasant, Borrowdale, Gun Hill and Helensvale. Rentals were going for between US$300 and US$1 000 monthly.


While government has pegged the US greenback at $824 against the Zimbabwe dollar on the parallel market it is going for as much as $3 500, making the landlords monthly millionaires.


Estate agents interviewed confirmed that the landlords wanted “United States dollars only” and preferred diplomats for their mansions.


Diplomats are extremely popular as tenants because they pay for their accommodation in foreign currency and in full annually.


Some of the landlords are advertising requesting six months rentals in advance for their properties in what has been described as “maximum profiteering at the shortest possible time”.


Landlords living abroad, Zimbabwean politicians and business executives who have access to foreign currency own most of these designer properties, some of which are fitted with elevators.


“The Zimbabwe dollar is the legal tender in the country and, as such, all payments must be made in local currency,” Chikaura told businessdigest this week in a written response seeking clarification on the issue.


“A dispensation was, however, given to hotels and other tourist specialist services to receive payment in foreign currency.”


The RBZ boss said this measure had become necessary to improve convenience for Zimbabwe’s visitors, while at the same time encouraging foreign exchange inflows.


“Requiring payments for rentals, properties or other goods and services in United States dollars is, however, illegal,” Chikaura said. “Again, collective action by both the bank and other law enforcement agents is critical, in dealing with this problem.”


The Estate Agents Council had pointed out that it could not deal with the sensitive issue since it was the responsibility of the RBZ to collect foreign currency in the country.


The property market has became a hive of activity in Zimbabwe because of the country’s hyperinflationary environment. Inflation continues to shoot through the roof monthly and has gone from about 200% in January this year to 399,5% for July. Individuals and corporates including blue-chip counters listed on the Zimbabwe Stock Exchange are now eyeing the property sector to hedge against inflation and add value for their shareholders.


Companies that have decided to enter the property market include Mashonaland Holdings Ltd, Zimsun leisure group, First Mutual Life Society of Zimbabwe and NicozDiamond.


Individuals, on the other hand, are building designer mansions some of which are the envy of mega stars living in Hollywood, US.