TREASURY has directed all Government ministries, departments and agencies (MDAs) as well as local authorities to collect all fees and levies in Zimbabwe dollars only, except where specified, as the Government steps up measures to promote the use and desirability of the local currency.
This comes as measures instituted by Treasury and the Reserve Bank of Zimbabwe (RBZ) have started yielding the desired impact that has manifested in exchange rate and inflation stability.
In a directive to all MDAs and local authorities, Secretary for Finance and Economic Development, Mr George Guvamatanga, said: “Any collection of fees and levies for services rendered in foreign currency by Government Ministries, Departments and Agencies, as well as local authorities, is illegal and should be in local currency at the prevailing interbank rate, unless granted exceptional approval by Treasury”.
The directive from Treasury comes as some Government institutions, including local authorities, had started demanding payment of fees and levies exclusively in foreign currency, especially in light of the then resurgent inflation.
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 sought to ensure continued service delivery.
The notice read: “Council wishes to advise its valued residents and stakeholders that certain fees chargeable by council are now payable exclusively in United States dollars (USD) with effect from the 1st of September 2022.
“The fees exclude all charges that are accessible through the monthly bills, i.e. water consumption, sewerage, refuse collection and rates. The above-mentioned charges will remain open to being payable using multi-currency as may be opted by the client.
“This development is in line with council’s resolution made on the 3rd of August 2022 and the need to capacitate council to continue sustaining service delivery. The US dollar tariffs will remain as contained in the 2022 approved budget or Schedule 25A.”
But Mr Guvamatanga, citing the law, said: “Section 78 (1) of the Public Finance Management Act (CAP 22:19), empowers Treasury to prescribe or issue instructions or directions to ministries, whether individually or collectively, concerning the determination of any sales of fees, other charges or rates relating to revenue accruing to the Consolidated Revenue Fund.”
He added that notwithstanding the current trends where service providers and traders have been allowed to charge prices for goods and services in both foreign currency and local currency, the Government has the mandate to provide services at cost recovery levels, cognisant of the need to ensure affordability and accessibility to the general citizenry.
Ostensibly, some public institutions had misconstrued Government’s intentions when it gazetted a law entrenching the use of a multi-currency system for the duration of the National Development Strategy 1 (NDS1), which runs for five years through 2025.
All MDAs and local authorities that had placed such notices prescribing exclusive payment in forex have been ordered to immediately withdraw them and revert to a pricing framework which is guided by the Government policy position.
The Government has previously instituted measures aimed at promoting the use and desirability of the local currency, among them payment of most duties and levies for Government services and royalties by mining firms, in local currency.
Economist Mr Eddie Cross, a known strong advocate of the local currency, said due to challenges being encountered in a dual currency system, the best way forward should be to “de-dollarise completely and float or allow the US dollar to find its range freely”.- state media