Zim Money Changers Adopt New Tricks
Business Money & Markets

Zim Money Changers Adopt New Tricks

Illegal money changers in Harare and other parts of the country are now hanging around and even inside supermarkets that might have a reasonable number of shoppers using foreign currency offering to pay a premium.
They use their bank cards or Ecocash to pay for groceries and other items on behalf of shoppers and get the hard currency later.

The near-ubiquitous CCTV systems that most supermarkets have installed to prevent shoplifting are just as good at catching currency deals on the premises, and the supermarkets dislike the practice.

Some even get to an extent of pushing trolleys for the customers in supermarkets, make payment and assist the shopper to pack the groceries in their vehicles.

In some shops, illegal money changers pose as genuine customers, picking some items and putting them into trolleys. They then sidle up to likely targets and ask if they are using US dollars. If the shopper is not the dealer breaks off and starts stalking another target.

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Officially, US$1 is worth a whisker under $84, but the illegal foreign currency traders are offering higher rates ranging from $100 to $110 per US$1. Cash rates are lower, around $90.

Traditionally, illegal money changers in Harare hung around Patrice Lumumba Street near the intersection with Agostinho Neto Avenue opposite Meikles Hotel, around the south and west sides of Eastgate Mall, outside Roadport international bus station, in Kwame Nkrumah Avenue at the back of Holiday Inn and some shopping centres across the suburbs, both high and low density.

They are still there, but some, faced with the competition, are now trying the supermarkets.

Supermarkets like OK Zimbabwe, Pick n Pay, Mahomed Mussa, Spar and others that stick to the official auction rates in their transactions are mostly targeted by illegal money changers.

Smaller shops that illegally trade at exchange rates higher than the official rate do not attract illegal money changers.

At one stage police did wonder if shop owners using official rates were working in cahoots with the illegal changers, and some shop owners were even questioned, but none have been charged and the police now accept that the shop owners are as against the practice as they are.

Zimbabwe Retailers Association president Mr Denford Mutashu confirmed the new business approaches of the “store dealers”.

“Illegal foreign currency traders operating on the entrances to major shops have become a menace. They are an ugly creature, not only to us, but to the entire economy. They are weighing down on positive policies introduced by the Government to revive the economy,” he said.

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Much of the forex meant for formal shops, is being collected by illegal traders outside major shops, resulting in serious foreign currency shortages for certain imported consumer goods.

While industry can go to the auctions, and store owners can buy local products without foreign currency, the commercial sector still has to find its own currency to import some of the luxury and semi-luxury consumer items that are not on the auction priority lists.

They were relying on raising their own foreign currency by offering to take US dollars and other currencies at their tills, but using auction rates. Now, especially in the city centre, shops are seeing fewer foreign currency shoppers.

“It’s a huge problem for the sector. It is now difficult for established shops to raise forex for restocking. All forex is now being mopped and diverted to the black market.

“We are not an arresting authority, but we continue to engage the police in our quest to curb the rot. The police have tried their best, but they are also facing challenges. “

We need to work together with the law enforcement agents,” he said.

As part of an investigation, an investigative journalist visited a number of shops in Harare, including OK First Street, Pick n Pay Kavalamanja Battle Street and Mahomed Mussa Wholesalers in Guy Clutton Brock Avenue where money changers had slunk into the premises, pretending to be shoppers and sliding up to those who they thought might be using US dollars. At Pick n Pay Jason Moyo Avenue, illegal money changers could be seen pushing trolleys as if they wanted to buy, when they intended to negotiate with buyers.

“My brother, are you using US dollars? I can swipe for you at a good rate of US$1:$110. It’s cheaper for you because the shop uses a lesser rate of US$1:$83,” said a female money changer, who used to operate from Eastgate Mall.

Asked on the rate for EcoCash payment, the woman said: “For EcoCash transactions our rate is US$1: $100 because the charges of transacting are higher,” she said.

At OK First Street Mall, the rate for using bank cards was US$1: $105 when EcoCash rate was at US$1: $100.

Illegal money changers at OK First Street offered to push the trolley for their “clients” in the shop assisting in picking groceries.

They also offered to push the trolley to the vehicle where they would get their cash. They no longer accept to be paid their US dollars in the supermarkets for fear of being captured by cameras.

Beitbridge town is generally a rand economy due to the area’s location at the busiest inland border in Sadc.

Many people transact in foreign currency which has resulted in some informal currency dealers camping near or at established wholesale shops including N. Richards and N & R, and other shops, where they target those people intending to buy goods using either South African rands or United States dollars.

They offer lucrative rates which are slightly above the official auction rates. In exchange for the foreign currency, they either buy goods on behalf of the clients using their credit cards or transfer money into the clients’ bank accounts.

One dealer who preferred anonymity said their major clients were shop operators from the rural part of the district who use mainly rand to restock goods for their shops.

“You will note that because of network connectivity in rural parts of the district, many transactions are done in foreign currency and hence there is a huge amount of rands in circulation there. “It’s cheaper for the shop owners to buy goods using local currency at the wholesales and hence we offer them lucrative deals,” said the dealer.

In Bindura The Herald visited Pick n Pay supermarket where money changers were openly touting for clients on the entrance.

The illegal transactions were being done in full view of some police officers who turned a blind eye and chose to mind their own business.

A woman who was pacing around the Pick n Pay supermarket while displaying wards of notes approached The Herald reporter offering to buy for her using her bank card at the rate of US$1: $100.

The situation was the same at N. Richards where people illegally transacted without fear. Herald

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