What Is Statutory Instrument 246 of 2018?
SI 264 is a new law with three major elements:
- Framework for seizing unexplained wealth (money, properties, shares, companies, assets etc) with value above US$10 000. This is targeted at wealth acquired through corruption, illegal activities, money laundering, crime, theft etc.
- Establishing a Asset Management Unit (AMU) within the Reserve Bank of Zimbabwe (RBZ) which will manage the seized unexplained wealth.
- Penalty for illegal money changers: upto 10 years jail term.
Given the economic history of Zimbabwe since the beginning of the 21st century where can one place the newly enacted SI 246 in the development trajectory of our economy? Coupled with the introduction of the 2% tax, one might want to look at the SI 246 as a resource mobilisation gimmick implored by our government, this time targeting the corrupt. Quite innovative of our government, don’t you think? Perhaps business owners should learn a thing or two from the tools implored by our government when mobilising for resources. Speaking of mobilising resources for Zimbabwe, shouldn’t there be some national transparency scheme which tracks how loans given to this country are utilized? I would strongly recommend that such mechanisms be put in place before we start to envision benefits accruing from the SI 246. Failure to do this, we might end up painting this SI 246 as yet another resource mobilisation gimmick implored by our government for the benefit of a few.
A leeway for corruption among enforcers of the policy
It is quite unfortunate that this new statutory instrument has been introduced at a time when economic hardships push people towards corrupt practices at the expense of public good. Perhaps as a suggestion, a different crop of individuals should be tasked to implement this SI 246, otherwise there is a risk that new cases of corruption will surface as those affected by the law seek to safeguard their gains. In this regard, a question might surface as to who will take up this task? How will they make sure that whatever proceeds realized are not in turn personalized by yet another crop of wealth individuals? One might want to suggest that this task should be taken by business owners since they are the ones largely affected by the financial crisis. With so much to benefit from this initiative, the business players might work flat out to ensure that all the corrupt money is seized, a move which might discourage corruption and improve our economy.
An opportunity to be transparent and gain public trust
For the Zimbabwean economy to make it out of these economic doldrums, transparency issues need to be addressed first. This can be a face-saving stance for a government blamed for mismanaging public funds. Clearly, SI 246 is caught up in talks of big monies with a possible fine of up to $65 000. How will this be done to ensure that transparency prevails in these proceedings? Given the developments in our economy, the hand of the government has always been caught up on the wrong side of handling public funds. It would be a good opportunity for our dear government to reinvent its image and strive towards transparency both in the hunting down of suspected individuals and the handling of the confiscated resources.
Create a venture capital pool
One of the limiting factors stopping youths to start businesses is lack of capital. Small businesses also need money to fund growth. It would be ideal if government creates a venture capital pool from the confiscated resources with the aim of assisting small businesses. This in our view will be a noble cause and would again go a long way in changing the narrative of governance in Zimbabwe, at the same time altering the fortunes of the country`s youth. If this is adhered to, we believe that this SI 246 has the potential of becoming a watershed tool of changing the economic fortunes for the country in small but pertinent ways.
How should the unexplained wealth funds be used? Let us know in the comments below.
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