ECONOMIST John Robertson has come out strongly in favour of foreign currency trading on the parallel market, saying government should not penalise individuals who conducted their affai
rs on this market because they were doing it for the benefit of the nation.
Robertson said parallel market rates came into use at a number of official levels that validated the use of the rates by others.
“Air Zimbabwe calculated airfares, foreign embassies set visa fees and the United Nations transferred money from external banks using the parallel market rate,” Robertson said in a presentation on foreign currency problems.
“Noczim also made use of the parallel market to overcome fuel shortages on several occasions and the Reserve Bank of Zimbabwe sourced money from this market to pay the German company that printed the initial consignment of the new $1 000 notes.”
He said because the parallel market rate permitted those with foreign exchange to buy Zimbabwe dollars at a significant discount, the market helped to attract foreign exchange into Zimbabwe in the hands of traders and visitors, and Zimbabweans working abroad willingly sent it to relatives and friends.
Robertson said to try to ensure that the money would be transferred safely, they often used formal banking channels and various internet sites that ensured the payments were made to local beneficiaries.
“Significant proportions of all goods sold by retailers and manufacturers were paid for with money earned abroad, and most of this money would not have been brought or sent into the country if the rigid official rates had ruled for its conversion into Zimbabwe dollars,” he said.
Robertson said all of this activity arose from the distortions that were injected into the financial system through the adoption by the authorities of unworkable, irrational and illogical exchange rate policies.
“The faults lay entirely with the policy-makers, not with the individuals who found they could take advantage of the gaps opened up by imposed distortions,” he said. “Government should now accept full responsibility for the entirely predictable behaviour patterns that emerged. Its own active involvement in the parallel market was ample proof of the inadequacy of the laid-down policy directives and the maintenance of these defective measures year-after-year is proof of the incompetence of the policy-makers.”
Robertson said any move at this stage to penalise businesses or individuals that were forced to use the parallel market to buy or sell foreign exchange, whether for survival or for profit, whether willingly or under duress, should be immediately ruled out of order.
“Government has the only case to answer, as it was never given the mandate to create impossible conditions for citizens engaged in normal business activities,” he said.
NMB Ltd bosses Julius Makoni and James Mushore fled the country after government accused them of externalising foreign currency among other issues.
They too contend they are not guilty of the charges.