Photograph — sunday mail.com.zw

The Reserve Bank of Zimbabwe (RBZ) froze an account belonging to a Chinese company on grounds that the company has been manipulating the country’s local currency.

China’s Nanchang is said t0 have traded millions of Zimbabwe’s currency for United States dollars on the black market, an act that weakens the local currency. The company is a major contractor for the construction of a dam that is supposed to supply water to Bulawayo.

John Mangudya governor of RBZ, in a statement on Friday, classified China Nanchang as a currency manipulator. Mangudya further said that the RBZ financial intelligence unit (FIU) had identified Nanchang as a company that had used millions of Zimbabwe dollars to buy greenbacks on the black market. This comes amid the recent currency swap deal between the two countries.

An order was given by the FIU to freeze Nanchang’s account pending further analysis. There has yet to be any comment from the company, with no mentions by the central bank if the account was held with RBZ or with another bank. However, the FIU has set up ongoing surveillance to identify more culprits involved in the parallel market transactions.

This will not be the first time the central bank is taking such an action. Last year, the central bank temporarily froze accounts belonging to four companies with similar charges. Although the action taken by the central bank is good, it does not come without dire consequences for both parties.

The city of Bulawayo has been enduring a four-day water-shedding regime since last month as water levels in the supply dams continue to go down. According to official statistics, it appears the recent rains have done little to change the situation at the supply dams.

Nanchang in partnership with the Zimbabwe national water authority is constructing the Gwayi-Shangani dam which has the capacity to generate six megawatts of electricity and supply water to Bulawayo. This project will be a long term solution to the critical drought faced by the people living in Bulawayo.

But with the current situation, the project will have to be halted as there will be no access to funds. This will lead to an extension in the completion of the project and an extended period of water shortage in Bulawayo. Therefore, it is advisable that FIU quickens its investigation as the people will have to bear the brunt of a prolonged investigation.

Zimbabwe’s economy has been dealing with a weakening currency along with shortages of cash, foreign exchange, fuel shortage, electricity among others, leading to the country experiencing its worst economic crisis.

By Faith Ikade.

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