Treasury warns Ministries and Councils on illegal forex pricing
Treasury has directed Government Ministries, Departments and Agencies (MDAs) as well as local authorities to stop charging for goods and services in foreign currency as the practice is illegal.
In a letter to all MDAs and local authorities, Permanent Secretary in the Ministry of Finance and Economic Development George Guvamatanga said, “Any collection of fees and levies for services rendered in foreign currency by Government Ministries, Departments and Agencies, as well as local authorities is illegal and should be in local currency at the prevailing interbank rate, unless granted exceptional written approval by Treasury.”
The directive came as some Government agencies, as well as local authorities are now advertising in the media prescribing payment for some services exclusively in foreign currency.
Earlier in the week, Harare City Council (HCC) announced that some of its services shall be paid exclusively in US dollars with effect from the September 1, 2022. In a notice the local government authority said the move was aimed at ensuring continued service delivery.
The statement read, “Council wishes to advise its valued residents and stakeholders that certain fees chargeable by Council are now payable exclusively in United States Dollars (USD) with effect from the 1st of September 2022.
“The fees exclude all charges that are accessible through the monthly bills, i.e. water consumption, sewerage, refuse collection and rates. The above-mentioned charges will remain open to being payable using multi-currency as may be opted by the client.
“This development is in line with Council’s Resolution made on the 3rd of August 2022 and the need to capacitate Council to continue sustaining service delivery. The USD tariffs will remain as contained in the 2022 approved budget or Schedule 25A.”
However, Guvamatanga in his directive cited the law saying “Section 78(1) of the Public Finance Management Act (CAP 22:19), empowers Treasury to prescribe or issue instructions or directions to ministries, whether individually or collectively, concerning the determination of any sales or fees, other charges or rates relating to revenue accruing to the Consolidate Revenue Fund.”
He added that, notwithstanding the current trends where service providers have been allowed to charge prices for goods and services in both foreign currency and ZWL, Government has the mandate to provide services at cost recovery levels, cognisant of the need to ensure affordability and accessibility to the general citizenry.
All who had already placed such notices have been ordered to immediately withdraw them and revert to a pricing framework which is guided by the Government policy position.-ebusinessweekly
