Government blacklists 19 parallel market kingpin entities

NINETEEN entities have been blacklisted from doing business with the Government after they were found guilty of abusing the country’s monetary systems to drive wild parallel market exchange rates.

Government has tightened screws on monetary policy in a bid to weed out market indiscipline and recently, it instituted investigations on all payments to suppliers and contractors to ministries, departments and agencies in a bid to ensure value for money.

The exercise has exposed a massive overpricing scam by unscrupulous service providers, some of whom pegged their prices based on speculative market exchange rates as high as ZWL$2 000 per US dollar.

The obscene forward pricing of goods and services rendered to ministries, departments and agencies (MDAs), as well as parastatals and local authorities has been blamed for fuelling wild parallel market exchange rates and subsequent price escalation.

With Government being the major buyer, the move prompted the suspension of payments to some supplier contracts, which are now subject to a value for money audit review before the payments are made, as a corrective measure.

Finance and Economic Development Minister, Professor Mthuli Ncube, has revealed that 19 entities have been caught engaging in extortionist practices that left authorities with no choice but to ban the firms from doing business with the Government.

In a statement on Wednesday, the minister said the Central Bank’s Financial Investigations Unit (FIU) noted that upon receiving their payments, the blacklisted companies would engage in spontaneous illegal foreign currency transactions through buying foreign currency from individuals and entities.

“After a careful analysis, it was observed that certain pricing behaviours and trends in the supply chain to Government agencies and ministries pointed to weaknesses in the procurement framework and that these loopholes contributed to distorted pricing practices by the market and effectively fuelled inflation in the economy,” he said.

“It has been observed that some contractors after passing through the value for money process and having received their payment from Government still tend to siphon their proceeds into the parallel market thereby causing domestic inflationary pressures.

“A total of 19 companies have been identified by the FIU to be involved in the unlawful conduct.

According to the minister’s statement, the blacklisted entities are; Nariox (Pvt) Ltd, New Age Marketers, Pepwit Investments, Tirumi Investments, Mwendo Africa, Alg World Investments, Lobmer Investments, Nisbank Investments, Sailgroom Enterprises, Wayvar Investments, Poweride Safaris, Azelion Energy, Blackdeck, Paza Buster, Redan Coupons, The Best Car Rental, Josam Enterprises and Construction Warehouse.

Prof Ncube said some of the firms would also purchase fast-moving consumer goods from various manufacturers and the goods would then be sold exclusively in foreign currency.

He said in an endeavour to maintain sanity in the foreign currency market and to curb inflation, the Government has been left with no other option than to blacklist the 19 companies.

“The Procurement Regulatory Authority of Zimbabwe (PRAZ) will be advised accordingly, to blacklist these entities from doing business with Government,” said Prof Ncube.

Procurement Regulatory Authority of Zimbabwe (PRAZ)

Recently, financial authorities said pricing models adopted by contractors and suppliers leaned on ridiculous extortionist behaviour and are not anchored on economic fundamentals.

Last month, it emerged that the Parliament of Zimbabwe was billed US$10 000 per laptop, which is way above general market prices for high specification laptops while a 2kg pack of chicken was claimed to be worth US$30 against market prices of a maximum of US$6.

To that end, the Government warned that such speculative behaviour will no longer be accepted nor tolerated going forward and urged all stakeholders in the economy to benchmark prices fairly for all consumers as this bolsters confidence in the economy.-chronicle.cl.zw