Government ministries, agencies instructed to only accept local currency

The Chronicle

Tapiwanashe Mangwiro, Harare Office

The TRESOR has directed all Government Ministries, Departments and Agencies (MDAs) and local authorities to collect all fees and levies in Zimbabwean dollars only unless otherwise specified as the government steps up measures to promote the use and desirability of local currency.

This comes as the measures instituted by the Treasury and the Reserve Bank of Zimbabwe (RBZ) have started to produce the desired impact which has manifested itself in the stability of the exchange rate and inflation.

Reserve Bank of Zimbabwe (RBZ)

In a directive to all MDAs and local authorities, the Secretary of Finance and Economic Development, Mr. George Guvamatanga, said: “Any collection of fees and levies for services rendered in foreign currency by ministries, departments and government agencies, as well as local authorities, is illegal and must be denominated in local currency at the prevailing interbank rate, unless exceptionally authorized by the Treasury”.

The Treasury directive comes as some government institutions, including local authorities, had begun to require payment of fees and taxes exclusively in foreign currencies, especially in light of the then-soaring inflation.

Mr George Guvamatanga

Earlier last week, the City of Harare announced that some of its services would be billed in United States Dollars (USD) starting September 1, 2022.

In the notice, the local authority said the move was to ensure continuity of service provision.

The notice read, “The Council wishes to inform its valued residents and stakeholders that certain Council-billable fees are now payable exclusively in United States Dollars (USD) effective September 1, 2022.

“Charges exclude all charges accessible through monthly bills, i.e. water consumption, sewerage, garbage collection and tariffs. The aforementioned fees will remain liable to be payable in several currencies, at the customer’s choice.

“This development is in line with council resolution taken on August 3, 2022 and the need to empower councils to continue to maintain service delivery. US dollar rates will remain as listed in the 2022 Approved Budget or Schedule 25A. »

But Mr. Guvamatanga, citing the law, said, “Section 78 (1) of the Public Financial Management Act (CAP 22:19), empowers the Treasury to prescribe or issue instructions or directives to departments, individually or collectively, regarding the determination of any sale of rights, other charges or rates relating to revenues accruing to the Treasury.

He added that despite current trends whereby service providers and traders have been allowed to charge prices for goods and services in both foreign and local currencies, the government has a mandate to provide services on a cost recovery basis. levels, aware of the need to ensure affordability and accessibility to all citizens.

Apparently, some public institutions misinterpreted the government’s intentions when it published a law in the Official Gazette enshrining the use of a multi-currency system for the duration of National Development Strategy 1 (NDS1), which spans five years through 2025.

All MDAs and local authorities that had placed such notices prescribing exclusive payment in foreign currency were ordered to remove them immediately and revert to a charging framework guided by government policy position.

The government has previously instituted measures to promote the use and desirability of local currency, including the payment of most utility fees and royalties by mining companies, in local currency.

Economist Mr. Eddie Cross, a well-known ardent supporter of the local currency, said that due to the challenges in a dual currency system, the best way forward should be to “de-dollarize completely and either float or allow the US dollar to find its range”. freely”.

Ashley C. Reynolds