• Tue. Apr 23rd, 2024

Dr. Mangudya sanctions rant true but misunderstood

ByEconomic Times

Mar 8, 2023

By ETimes

Reserve Bank of Zimbabwe (RBZ) Governor, Dr. John Mangudya dismissed the notion that the Bank is taking part in illicit gold trades as a way to bust sanctions set on individuals and the country.
 
The Governor was responding to snippets of an investigative documentary yet to be released by Al Jazeera, which implicates the Bank in illicit gold trading.
 
“It is particularly strange that the reports claim that “through the Bank, Government is using illicit ways as a scheme to bust international sanctions placed on political leaders and government entities”,” Dr. Mangudya wrote.
 
The RBZ premier added that, the Bank is not a sanctioned entity, and the cited individuals are not sanctioned persons either.
 
Dr. Mangudya said, “There are no sanctions on Zimbabwean exports and imports, including trade in gold, to warrant Zimbabwe to “circumvent international sanctions” through illicit trade in gold.”
 
He added that since that is the position, the Bank does not need to be used as “a scheme to bust international sanctions using illicit ways” as it shows that the people behind this narrative have goal to paint the Bank and the country with a brush of lies and deceit.
 
However, as much as the Bank is not sanctioned, the embargos have affected the ability of entities to increase capacity through off shore funding.
 
Institute for Security Studies research in 2019 and 2020 found that investors were put off by the high risk premium placed on the country because of the targeted US sanctions. And numerous international banks have cut ties with Zimbabwean banks because of the onerous task of complying with US Office of Foreign Assets Control (OFAC) regulations.
 
OFAC monitors sanctions adherence and penalises any US company or individual who does business with a sanctioned individual, entity or country.
 
Most companies in the US, Canada and Europe would rather avoid doing business with Zimbabwean companies because of the cumbersome process of checking if entities are related to a sanctioned person or company.
 
 The risk of being caught on the wrong side by OFAC is high. Many companies in Zimbabwe have gone under or are operating at a suboptimal level – unable to procure goods and services from Europe, Canada, Australia, the US and UK.
 
The listing of companies such as Chemplex Holdings and Zimbabwe Fertilizer Company harmed food production as it affected the availability and affordability of fertiliser.
 
The businesses were added because their ownership structure included the Industrial Development Corporation of Zimbabwe – an entity under sanctions. All this affects ordinary citizens, not least because some international financial institutions won’t process transactions involving Zimbabwe.
 
“The Bank reserves its rights to take appropriate legal action or initiate necessary sanctions against the interviewees and purveyors of the fake news to protect its fiduciary responsibilities in the national interests,” the Governor said.
 
He advised the public to dismiss the false allegations with the contempt they deserve. The Bank remains confident that the truth cannot be hidden, and that the truth shall prevail – Harare

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