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FILE - Hawkers sell goods on the streets of Harare, Sept. 17, 2015.

HARARE (Reuters) - Zimbabwe will force importers to declare sources of foreign currency and those who fail to prove they obtained the money from banks will forfeit their goods to the state, a government official said on Friday.

Deputy finance minister Clemence Chiduwa said the directive was meant to tame the black market for dollars.

Shortages of foreign currency, fuel and electricity are characterising Zimbabwe’s worst economic crisis in a decade and have dashed hopes the economy might recover under President Emmerson Mnangagwa who took over from Robert Mugabe in 2017.

Chiduwa told reporters that demand for foreign exchange was still high even after the government ended a decade of dollarisation in June in a major step towards fully restoring its domestic currency.

He added that the practice by local businesses of indexing prices to the U.S. dollar was driving up inflation, which economists say reached 440% in October.

“In the event that you are not able to declare the official source of foreign currency, you forfeit whatever you have to the state. So this will deal with black market operations,” said Chiduwa.

Foreign currency shortages have also been worsened by Zimbabwe’s failure to attract foreign investment and loans. The country owes foreign lenders more than $9 billion, most of it arrears, and does not qualify for new funding.

Western nations channel financial help through local charities, but China has emerged as a major direct donor and investor by funding infrastructure like airports, power and water.

On Tuesday, however, China accused Zimbabwe of understating its financial help, after budget figures released last week showed that Beijing ranked poorly on the list of Harare’s foreign donors.

Finance Minister Mthuli Ncube said China provided $3.6 million between January and September this year but the Chinese Embassy in Harare said it had provided $136.8 million.

In a country where authorities have a history of quietly racking up foreign debt without the approval of parliament, the funding discrepancy immediately raised questions from government critics as to whether it was hiding figures or it had just made an accounting error.

On Friday, Chinese ambassador to Zimbabwe Guo Shaochun told Reuters it was an accounting issue by Zimbabwe, adding that Harare accepted that figures released by China were correct.

Ncube also told reporters the issue had been resolved. (Reporting by MacDonald Dzirutwe; Editing by Olivia Kumwenda-Mtambo and Andrew Cawthorne)

VP Chiwenga

Retired General Constantino Chiwenga is back in Zimbabwe from China where he has been undergoing treatment for an undisclosed ailment, according to the state-controlled Zimpapers Images, an entity of Zimbabwe Newspapers Group.

Zimpapers Images captured Vice President Chiwenga arriving at Robert Gabriel Mugabe International Airport accompanied by plainclothes security men and being greeted by the Chinese Deputy Ambassador to Zimbabwe, Zhao Baogang.

At least seven photographs show him in a seemingly jovial mood and shaking hands with his brother, son and close associates.

Zimpapers Images wrote in one of the tweets, “Vice President Constantino Chiwenga is welcomed by elder brother Onisimo and Son Tawanda at RG Mugabe International Airport in Harare, this morning, Nov 23, 2019.”

Another one shows him shaking hands with Ambassador Baogang and reads in part, “Vice President Constantino Chiwenga speaks to China's Deputy Ambassador to Zimbabwe, Mr Zhao Baogang upon his arrival at RG Mugabe Inter Airport this morning, Nov 23, 2019. @HeraldZimbabwe @SundayMailZim @williamchikoto @ZTNnews @SundayNewsZimba.”

Chiwenga was airlifted to China in July this year amid reports that he was seriously sick. A few months later President Emmerson Mnangagwa told the nation that the retired general was getting the necessary treatment from doctors drawn from Zimbabwe, China and South Africa.

He did not disclose his illness.

Chiwenga played a key role in 2017 when the Zimbabwe Defence Force staged a defacto military coup that led to the toppling of the late former president Robert Mugabe.

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