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Business Executives: Pardon People Externalizing Millions of Dollars

  • Irwin  Chifera

Millions of dollars are believed to be in offshore accounts in some nations.

Millions of dollars are believed to be in offshore accounts in some nations.

Some business executives and economic experts on Wednesday urged the Reserve Bank of Zimbabwe to offer amnesty to the more than 280 business people and individuals accused of illegally externalizing millions of dollars so that the funds can be brought back home or be legitimized as foreign assets.

Indications are that some of the Zimbabweans are not on the leaked searchable data, known as the Panama Papers, published on Monday by the International Consortium of Investigative Journalists.

In a suggestion to monetary authorities, former Kingdom Bank owner and Harare businessman, Nigel Chanakira, said instead of laying charges against offshore account holders, Zimbabwe could benefit immensely if it comes up with a neat way of bringing that money back home.

"All that money that is out there actually a net foreign asset for us, so the 288 people bring it home. I would say we have about $10 billion from what you were indicating per annum. I think let’s have a neat way of bringing it back home or leveraging of it," said Chanakira.

He said taking punitive measures could result in the country completely losing the money which stands at about $10 billion going by Reserve Bank estimates that the country has been losing $2 billion annually through externalization since dollarization in 2009.

Chanakira said other nations like Nigeria have been prudent enough to realize those investments were foreign assets which should be brought home and taxed accordindly.

“Countries like South Africa where that money has been moved out as investment because people have been cautious have been smart enough as to allow a period of declaration and sanitization of those funds and then with a view to penalize those people who keep those funds undeclared. I am therefore recommending to the government of Zimbabwe and specifically to the governor of the Reserve Bank of Zimbabwe to prudently consider those foreign assets,” he said.

Zimbabwe National Chamber of Commerce deputy president, Devine Ndlukula, urged the central bank to consider Chanakira's idea.

“The RBZ might to need to manage the way people are going to be allowed to bring back the money that they have externalized in a manner that is not punitive,” said Ndhlukula

These suggestions were also echoed by economics professor Ashok CHakravati.

“It’s not something unusual many countries have done it, they have actually given an amnesty for that kind of transaction whereby you can bring back funds and there should be a fixed amnesty period and it should be clearly defined in the law and it’s a very good proposal,” he said.

Africa Leadership Convention chief executive officer, Davision Gomo, said if there was conclusive evidence that the money was wrongly externalized it must be brought back home.

“But I think what’s more important is making sure we plug all the holes that allow for that externalization. That’s far more important than what you are suggesting,” said Gomo.

Confederation of Zimbabwe Retailers President, Denford Mutashu, said while he supported the idea of bringing back the money those uncooperative must be prosecuted.

Reserve Bank Governor, John Mangudya, while not committing to dialogue with the accused, said some of the cases were now being investigated by the police.

“The Reserve Bank is not an investigating arm it’s a regulating arm of course we have our financial intelligence unit but this goes through the normal process of investigation,” Mangudya said.

He called for discipline among businesspeople saying most of them were blaming the government for problems which they created themselves.

Finance Minister, Patrick Chinamasa could not be reached for comment on this matter.

The Reserve Bank under the Gideon Gono instituted several arrests of businesspeople and bankers for externalization funds but none of them were convicted.

Over 280 Zimbabweans appear in the Panama Papers, including some prominent business people.