afrol News, 11 October - In a bid to get total control over the large amount of funds being transferred from the Diaspora to Zimbabwean residents each day, the Central Bank of Zimbabwe has outlawed 16 private money transfer operators, gaining an effective monopoly on the service. The large foreign exchange revenues, due to a discrepancy between official and black market rates, are to go directly into government treasury.

The announcement to ban the 16 money transfer agencies from operating in Zimbabwe was made by Reserve Bank Governor Gideon Gono in a speech delivered on Monday. Mr Gono accused the foreign and local agencies of "non-performance and deviant behaviour by most players in this sector" that was leading foreign exchange from the Diaspora to end up at the black market.

Most exiled Zimbabweans have preferred to use channels that allow their relatives in Zimbabwe to cash out transfers in foreign exchange, which again gives them a much greater value on the black market. A large part of the Zimbabwean Diaspora is also strongly objected to the Mugabe regime, and does not want to contribute to its wealth by using official channels.

As of Monday, the Reserve Bank's own money transfer agency Homelink was given an effective monopoly on transfers while other transfer agencies were prevented from operating immediately after the announcement. The 16 closed agencies included the global leader Western Union and other big institutions belonging to the Standard Chartered Bank, Stanbic Bank, CBZ Bank, Interfin, the Central Africa Building Society and TransAfrik.

Homelink was established by the Reserve Bank in 2004 to assure increased government control over money transfers as inflation and a depreciated Zimbabwe dollar (Z$)led to an ever-growing black market. By now, black market rates for one US$ are up to five times the official rate. Homelink was to capitalise on this by only offering Z$ at official rates.

According to the Reserve Bank, Homelink was met with "support and enthusiasm" among the Zimbabwean Diaspora at its launch as the emigrants wanted "to assist Zimbabwe's economy" by using the service. Homelink however only has managed to gain a very small portion of the money transfer market during these two years, creating doubts about the announced "enthusiasm".

Despite the known desire by the Harare government to increase its control over money transfers, Bank Governor Gono announced the closure of the agencies in a move that totally surprised these companies. No first warning was given. "With immediate effect, all money transfer agency (MTA) licenses are cancelled. All local accounts for these entities should be closed forthwith," he said in his speech, referring to "deviant behaviour".

The announcement also meant that transfers from abroad to Zimbabwe in order were left in the air, causing desperation among many Zimbabweans waiting for an announced transfer yesterday. It could take a long time before these ongoing transfers reach their goal, as Mr Gono also announced that "existing contractual arrangements with Zimbabweans in the Diaspora shall be dealt with on a case by case basis."

Mr Gono finally gave money transfer agencies a ray of hope, saying "any aggrieved party" would be left a two-week window to appeal the decision and apply for a new licence. "Such appeals will only be entertained and licence reinstated on the basis of strict performance and delivery targets," the Bank Governor added, meaning he would not tolerate anything less than total state control of money transferred by private operators.

An estimated 3.5 million Zimbabweans meanwhile are living abroad, mostly in Southern Africa, the US and Britain. The outflow of Zimbabweans has increased drastically since President Robert Mugabe led the country into its present crisis. Most of those capable to spare some funds send money home to their family, who are mostly deeply affected by Zimbabwe's economic collapse.

By staff writer

© afrol News

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