Cash dealers invade tobacco auction floors

CASH dealers have invaded the tobacco auction floors in Harare hunting for the scarce greenback in exchange of bond notes, following the opening of the marketing season last month.


Tobacco growers are this season getting half of the $300 payment per sale in the form of US dollars, thereby attracting illegal forex dealers to the floors.

Money changers who traditionally were confined to Roadport and Copacabana environs in Harare’s Central Business District (CBD) have become ubiquitous in the city due to the biting cash shortages in the country.

Apart from the informal traders selling all sorts of wares at the floors, hordes of illegal forex dealers were last week seen by NewsDay milling around the tobacco sales floor premises holding wads of bond notes.

A money changer who spoke to NewsDay said he relocated to the floors from the city centre lured by the huge circulation of the greenback at the tobacco floors.

“I decided to come here after the opening of the tobacco season to buy dollars here in exchange with bond notes. We go where the money is, as you know that there are now many of us in the CBD chasing the same clients. Since I came here business is flourishing,” the dealer, who identified himself as Biggy said.

He was paying a 20% premium to get dollars in exchange for bond notes and was not offering electronic transactions such as bank and mobile money transfers.

As of April 12 , 23,7 million kg of tobacco valued $ 65,4 million went under the hammer at contract and auction floors as at least $30 million of fresh greenback was injected into the market.

Economist John Robertson said cash barons were taking advantage of the distortions obtaining in the market.

“It’s a reflection of the general scarcity of cash as well as lack of confidence in the economy. It’s obvious money changers are attracted by the greenback given to farmers at the tobacco floors. They want to make the profits through the distortions obtaining on the market,” he said.

Zimbabwe adopted a basket of currencies including the South African rand, US dollar, British pound, Botswana pula, Chinese yuan, Australian dollar, Indian rupee and Euro to stem hyperinflation.

The dollar dominated the market and subsequently went scarce leading to the introduction of bond notes in 2016, which monetary authorities pegged it at par with the greenback.

Since then, there has been a market discrepancy involving the dollar, bond note and plastic money resulting in the trading of the dollar at a premium on the parallel market.

The selling of money on the black market was banned in September last year when former President Robert Mugabe issued Statutory Instrument 122A of 2017 — Exchange Control (Amendment) Regulations 2017 (No 5) — to tame rife cash vending on the streets.

The law empowered police to arrest money peddlers and take hold of the traded currency.

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  1. Have the law changed with the new Government? We can nolonger move freely in town and on some places they are now completely blocking the way for both pedestrians and vehicles. Even if they are now allowed to sell cash, it must be orderly and not to disturb and waste time blocking other people who will be rushing to their work stations.


  2. Ini what is bothering me is the fact that these “cash hoaders” actually have the physical cash on them but then when you go to any bank,wanting to withdraw some money unopihwa probably around $80-40 dollars within a week.These so called money exchangers, mari vari kuiwana kupi uye US Dollar ravanenge vazopihwa with these inferior victims vanoiendesa kupi uye unani.The Law System in Zimbabwe failed or is ignoring to attend to such an issue many years ago.As long as such an is just debated like i am doing and not attended to practically by the law enforcement agents (who seem idle) this will continue to be a difficulty for all involved

    1. rega vamwe vararamewoo iwee!!iwe basa wakapihwa naani vamwe vese zvavarikushaya??

  3. if things start being normal and a zimbabwe that works for all of us unfolds, you will see all these things fizzle out on their on.Saka siyayi zvakadaro things would change when the time comes.Dont even bother about the chaos happening now.If zvinhu zvaku chinja you will see it with your own eyes and you wld not believe it only time will tell.

  4. Save, ndipo patinozoti gvt iri involved why, problem ikutangira kuma unethical entrepreneurs wakushanda Hand n glove with ese money changers, gvt
    ose ppl with access to cash have to options to make money, kutengesa as forex or kutengesa ku Ecocash kumaagencies .
    where the money is mostly coming from na kombis operators, nema indians who don’t bank but are achieving premium sales.
    I believe Charity begins at home, d gvt cnt b tyt on local and go lose on Foreigners,
    the govt must impose or negotiate on on the minimum cashout per person per day that way it leave Ecocash Agencies, with hoardes of cash wc can poise a security risk to them forcing em not to demand/order more from eir suppliers
    Gaya kuti some pple are nw charging giveaway commodity profit, knowing that they will get eir profit pakutengesa hard cash on Ecocash

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