Dennis Lobuntu Ndlovu
Business Reporter
The Consumer Council of Zimbabwe (CCZ) has expressed concern over the Reserve Bank of Zimbabwe’s newly announced exchange control penalties, warning that the one-size-fits-all approach may harm ordinary consumers and small businesses more than intended.
Speaking to a Zim GBC News reporter, Consumer Council of Zimbabwe (CCZ) Chief Executive Officer, Mrs Rosemary Mpofu, said the organisation supports the firm and transparent enforcement of exchange-control regulations. However, she warned that the blanket penalty of “1% of the transaction value or US$100,000 (ZiG equivalent), whichever is greater,” is excessive and could unfairly impact consumers and most small to medium enterprises (SMEs).
“This measure may be effective in curbing deliberate violations by large offenders,” Mpofu noted, “but without proper calibration and procedural safeguards, it risks triggering unintended consequences such as price hikes, financial institutions pulling away from vulnerable sectors, and reduced confidence in the formal market.”
The Reserve Bank of Zimbabwe (RBZ), under Governor Dr. John Mushayavanhu, announced the stringent measure last week, declaring it necessary to combat “recurring non-compliance” that distorts official trade data and manipulates the foreign currency market. The new rule, enacted under the Exchange Control Regulations, stipulates that offenders will be fined 1% of the transaction value or US$100,000 (or its ZiG equivalent), whichever is greater.
In a hardline statement, the RBZ outlined the common infractions it aims to stamp out.
“failure to settle export and import paperwork within set deadlines, neglecting liquidation requirements on export proceeds, forging documents and making cross-border investments without prior RBZ approval.”
The bank also cited “double dipping,” where entities obtain foreign currency from multiple sources for a single transaction.
“To promote compliance and enforce foreign exchange regulations governing trade and investment, the Reserve Bank has raised penalty fees to one percent of the transaction amount or one hundred thousand United States dollars whichever is greater,” the announcement stated, warning that serious cases could lead to the suspension or revocation of trading licences.
However, the Consumer Council of Zimbabwe (CCZ) has issued a sharp rebuke, acknowledging the need for firm enforcement but condemning the penalty’s “blanket” and “disproportionate” nature. The council argues that while the fine may be appropriate for large, wilful offenders, it is catastrophically excessive for households and small-to-medium enterprises (SMEs).
In a detailed commentary obtained by this publication, the CCZ laid out its core concern: “Setting a floor at US$100,000 means a small or inadvertent breach on, say, a US$5,000 transaction would still attract US$100,000, which is clearly excessive and out of step with proportional justice norms.”
The consumer watchdog warned of significant unintended consequences, including a likely “price pass-through risk” where large fixed penalties are ultimately factored into the cost of goods and services, raising prices for everyone.
They fear banks may engage in “de-risking” tightening documentation requirements or even dropping small clients altogether to avoid potential exposure to the massive fines.
“Large, fixed-minimum penalties tend to be priced into goods and services, raising costs for consumers,” the CCZ stated.
“SMEs may respond by over-compliance through avoiding legitimate transactions or shifting activity informally to avoid catastrophic downside.”
Instead of a one-size-fits-all approach, the CCZ is urgently recommending a tiered system calibrated to the size of the business, the intent behind the breach, and the severity of the violation.
“We urge Government and the RBZ to adopt a tiered, transparent regime with clear appeal rights,” the council concluded, pushing for graduated penalties that start with warnings for minor, first-time consumer errors and scale up to the severe US$100,000+ fines only for large-scale, wilful misconduct by major firms.
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