Published: 08 May 2014

The Confederation of Zimbabwe Industries Mashonaland Chamber president Sifelani Jabangwe says that South African firms are selling goods and services at half prices in an intricate scam that borders on money laundering.

Giving evidence before the Public Accounts Committee in Parliament on Monday, Jabangwe said that South African firms were moping out US dollars from the country.

"We have set down with members after noticing that South African products are selling at half price in most shops.

"We could not establish how goods could be sold that cheap after incurring transport costs and paying duties. It is from this background that we believe this could be some money laundering where firms get US dollars which is a stronger currency than the Rand then reconvert it back when in South Africa," he said.

Jabangwe said that local industry was uncompetitive because of unfair competition from imports that are at times subsidised by most governments.

Money laundering, at its simplest, is the act of making money that comes from Source A look like it comes from Source B. In practice, criminals are trying to disguise the origins of money obtained through illegal activities so it looks like it was obtained from legal sources. Otherwise, they cannot use the money because it would connect them to the criminal activity, and law-enforcement officials would seize it.

This comes amid calls by analysts that Zimbabwe should consider adopting the rand in a bid to make the local industries competitive given that two-thirds of Zimbabwe's trade is with South Africa which use a weaker currency, making their goods cheaper.

A senior University of Zimbabwe economics lecturer, Ashok Chakravarti has suggested that adopting the South African rand was the best measure going forward to make the economy competitive.

"Zimbabwe has become the regional and continental source of foreign currency, with almost every country jostling to sell goods and services to the Zimbabwean market, creating fierce competition for local industry. A weakening South African rand is making its goods cheaper for Zimbabwean importers who have a strong dollar," he said.
- Zim Mail

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