INVESTIGATION: Inside Zimbabwe’s multi-million dollar black economy

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“You will not believe that between US$1.5 million to $2 million exchange hands here on a day to basis,” Rod Zhou (Not his real name) said casually adding: “It also depends on the time of the year. Volumes are being pushed and the biggest players are the gold miners, the Reserve Bank of Zimbabwe (RBZ), traders of Indian origins especially Mohamed Mussa and a few mobile phone traders.”

Zhou quickly went into the nitty gritties of the multi-million-dollar illegal foreign currency dealing that has replaced the role of banks in Zimbabwe.

Many gold mines in Zimbabwe are owned by Zanu PF politicians. President Emmerson Mnangagwa has also been fingered in fueling black market.

With hordes of cash ranging from dollars to Rand to Pulas, young men and women patronise Harare streets, along 4th street, Roadport Bus Terminus, Eastgate Mall as well as the environs surrounding CopaCabana area.

They hold huge stashes of cash in their hands as they wave to would-be forex buyers without the fear of the police.

“We are no longer afraid of the police. If you are arrested, you pay US$20 fine and you are set free. It takes less than an hour to pay the fine and you will be back in the streets.

“There is a group of policemen which does not even arrest us. They only demand US$2 per person every day.”

Zhou rubbed his face as he tried to recall the police unit which collects “daily drinks” “… Yah do you know the section called PISI (Police Internal Security Intelligence)?”

“If you can spend the whole day here you will see them. Noone runs away from them. We make sure we have their $2 for the drink.”

I asked how much the police section gets given the number of people in the streets and Rod responded “It all depends how many people are in the street.”

I quickly scanned the number of illegal forex traders within the vicinity and estimated close to 80 people.

“So along this street they can collect like $160 per day?” I asked. “Yes but being a Monday there are few people. We can be around 150 to 200 people towards end of the week,” he said.

It dawned on me that on average the police officers can collect $200 per day which translates to $1400 per week and a whooping US$42 000 per month. Since they patrol in groups of 10 that can be shared to $4200 per person per month. Who would care to arrest such a cash-cow?

I left that story for another day. My mind was fixed on who supplies the dollars, Rand and Pulas that these “runners” run around with in their day to day dealings.

“If you had come yesterday you could have seen how my Rands were filled with flour and mealie- meal powder.

“So when the money comes from South Africa, it is packaged as flour or mealie meal then off loaded here in Harare,” he said.

“You think we talking small business here, my brother, it is big business because it is done by gold miners who smuggle their gold to South Africa and Mozambique.

Zimbabwe is losing an estimated 1000kg of gold annually through side marketing and illicit flows.

Reports suggest Zimbabwe has lost close to US$500 million annually to smuggling due to lack of support to gold miners.

“The gold miners are the big players because they shun Fidelity printers which offers less money and smuggle their gold to South Africa and Mozambique,” Zhou said.

“They sell the gold in Rands so they then smuggle the Rands into Zimbabwe. Because they want to buy or import raw materials they then bring their Rands to us so that we can buy the US dollars,” he said.

Zhou said the gold miners come twice a week and drop thousands of Rands which will be quickly sold out because of their low rates.

“We all rush to them because of their favourable rates,” he said adding: “The runners like to trade with gold miners than any other sources because they are not in a rush.”

As we spoke his mobile phone kept ringing as customers sought his whereabouts because they needed to buy Rands/Pulas/Dollars.

Since the time we began our conversation, Zhou sold R30 000 to clients who were calling on his mobile phone and he would direct them where to go and drop their Bond notes as they collected their Rands/dollars.

As we continued with the discussion, Zhou noted that the Reserve Bank of Zimbabwe is also a key player in the illegal forex market.

“RBZ has its own runners. These are well known car sales owners (Names supplied). They come here twice a week with thousands of Bond notes meant to buy US dollars,” he said.

“It is easy to identify RBZ money because it is always new and fresh (Bond notes). RBZ runners also flood the market because they come at once,” he said.

Zhou gave an example of the events of September 23 2017 when there was “panic buying” in Harare’s supermarkets.

“On that day RBZ flooded the market with Bond notes and wiped all the US dollars resulting in massive increase of basic commodities,” Zhou said.

Investigations revealed that RBZ uses car sales owners who then distribute the money to the ‘money changers’ in the streets.

On the fateful 23 September 2017, close to $600 000 (in Bond Notes) was offloaded into the market in batches of $200 000 in the morning, $200 000 in the afternoon and the other $200 000 in the evening.

On 24 September 2017 the RBZ governor John Mangudya issued a statement and dismissed rumours that the RBZ was printing bond notes and flooding them into the market to wipe all the US dollars.

“The Bank also wishes to advise that neither it nor the ministry of Finance and Economic Development will print bond notes to buy US dollars from the streets as suggested in social media and other reports,” he said.

“Such malicious statements are counterproductive and are meant to sabotage the economy that is on the rebound on account of the good agricultural outturn, strong performance of the mining sector and the recovery of the manufacturing sector.”

Investigations also revealed that traders of Indian origins especially Mahomed Mussa

who runs wholesales in Harare is now a leading forex buyer via bank transfers.

“Mohamed Mussa sells his groceries by swiping and ecocash. It means he has no forex to stock his wholesales so he has employed runners who then use bank transfers and ecocash transactions to mop out all the hard currency in the streets,” said Zhou.

“Many people come to sell their US dollars and may want the money to be deposited in their accounts so what we do is to get their banking details and then we transfer the money with a premium. Currently if you have $100 we transfer $155 into your account,” he said.


:- CIJZ investigation team