GOVERNMENT RESTRICTION HURTING FOREIGN DIRECT INVESTMENT IN ZIMBABWE

New government restriction by the Zimbabwe central bank limits the amount of money transactions that citizens can make in a day. Zimswitch Instant Payment Interchange Technology (ZIPIT) system was recently ordered by the central bank to implement daily and monthly limits of Z$20,000 (US$800) and Z$100,00 (US$4,000), respectively. 

ZIPIT is a platform that enables instant inter-bank funds transfer between ZIMSWITCH member institutions. The government claims that this new restriction is aimed at curtailing illicit transactions and money laundering that contributed to a currency rout. On the other side, this restriction is hurting the flow of investment for infrastructure projects as all transaction above the limit must be approved by the government. Complaining about the currency situation, Zimbabwe’s President Emmerson Mnangagwa, said that the currency is under attack from businesses that are constantly increasing prices of commodities. 

The Zimbabwe dollar is under pressure, and the nation could likely re-introduce the American dollar as a legal tender. These uncertainties in the market are not favourable for foreign investors.

SOURCE: Further Africa | Kenyan WallStreet | Aljazeera