In the face of prosecution, business leaders have made a passionate plea to President Emmerson Mnangagwa to revisit the externalisation list, citing administrative malfunctions in acquittals of bill of entries which affected some of the listed companies.

The release of the externalisation list on the 16 of this month attracted mixed sentiments from various spheres across the country.

A huge number of companies failed to comply with a directive issued by the highest office and this generated debated within business circles, culminating into a session organised by the Zimbabwe National Chamber of Commerce to unpack the aftermath particularly now when the President has said they will be prosecution of fingered companies that will fail to clear themselves.

The industry felt that there were some deficiencies in defining what constitutes externalisation a position heightened by Advocate Tendai Biti who was among the panelists during the debate forum.

The former Finance Minister was however reminded that he was part of the process that legalised this economic vice when he tampered with foreign currency accounts in 2009 which allowed for free movement of finances before a cap to reverse this anomaly was instituted in 2016 by the central bank governor, Dr John Mangudya.

While there are a number of emerging concerns raised by industry players, a legislator Temba Mliswa noted that it will be prudent for the companies to take corrective measures.

The debate forum thus brought a new angle into understanding the externalisation story which raises the need for enhanced interrogation that will ensure the real culprits are brought to book.

Real problem

The list has opened a pandora’s box of a dysfunctional financial system that was a fertile ground for illicit financial flows

The country’s financial and economic ecosystem has been described as porous owing to the liberalised exchange control regulations with regards to capital and current accounts that is not legislatively supported since 2009 amendments to the 1996 Exchange Control Act.

“Zimbabwe is institutionally weak in the financial supply chain functions of the economy as administrative shortcomings are being exposed on the externalisation list,” said Mr Jeffrey Rugare of Global Solar, one of the companies on the list.

Mr Rugare went to the extent of showing the ZBC News the company’s bill of entries of the money allegedly externalised.

“Poor communication and inefficiency between RBZ, banks and companies are major challenges that have given credence to individuals and companies externalising foreign currency or wrongly assumed to have engaged in illicit flows. There is communication breakdown in the financial sector with regards to acquittal of CD1 forms and if they are not acquitted then it follows that one would have externalised funds,” said Charity Jinya, the Bankers Association of Zimbabwe (BAZ) President.

For an industrialist, Mr Oswell Binha, ZIMRA’s malfunctioning ASSYCUDA system especially during the last quarter of 2017 where manual entries were being done and corruption became the source of externaliation, thereby creating problems for the polarised exchange control regulations.

“Weak institutions being witnessed in the country are the cause for a dysfunctional financial system,” he said.

Way forward

However, after all has been said and done the main focus of the authorities is not to shame the people involved but to encourage and reward good behaviour and proper corporate governance for the betterment of the country.

In order to close the floodgates of externalisation opened in 2009 through the liberalisation of capital and current accounts by the then Minister of Finance during the inclusive government, industry captains have urged parliament to harmonise  and realign exchange control laws to plug leakages and avoid misinterpretation of such by individuals and companies when doing cross border transactions.

The Exchange Control Act of 1996 was regulating the Zimbabwean dollar, now we need to realign our laws so that they are responsive to the multicurrency system,” said ZNCC President, Mrs Divine Ndlukula.

“Even after the publication of the externalisers list, the government left avenues of dialogue as highlighted by President Mnangagwa’s statement that accompanied the release which indicated the central bank’s readiness to process transactions where concerned parties had proof of declaration of repatriation. It is thus crucial that concerned companies come forward and the government engages them. The government should also consider extending timelines to allow those with money outside to return it,” the President of Confederation of Zimbabwe Retailers, Mr Denford Mutashu said.

“As a complimentary solution, ZIMRA will also put our act in order to ensure that our systems are always up. We also need to widen our net to account for those operating in the underground economy. We need to identify every company operating in this economy and see whether they are paying taxes and not externalising money. These individuals and companies appear mainly listed on category three of the list and the magnitude of their economic activities is not in tandem with the huge amounts of money they externalised,” said Mrs Willia Bonyongwe, the ZIMRA Chairperson.

The strengthening of the laws to avoid and criminalise externalisation of money is already underway with the enactment of the Money Laundering Act by parliament last month.

The publication of the list will punish wrong doers but at the same time ensure that in future, Zimbabwe’s economy does not become a victim to money laundering and illicit financial flows.