Release of 2018 seized forex will boost investor assurance

24Sep 2021
The Guardian
Release of 2018 seized forex will boost investor assurance

GOVERNMENT agencies are going through procedural action meant to sort out some bottlenecks to the business environment which have piled up over the last few years.

One such situation is where owners of bureaux de change in Arusha and Kilimanjaro regions whose money and office equipment were seized in a central bank and police operation in 2018 are asking that they get their property back.

The matter is being discussed at middle and higher levels of financial institutions, especially at the Bank of Tanzania. However, the aggrieved parties have since decided to come out and make a direct appeal to President Samia Suluhu Hassan to do the needful.

Reports from Arusha indicate that the various operators have been handed back their licences but that, without having the money back, it would imply that they are starting afresh.

This would be the case whereas they were not taken to court for any suspicions, while their assets were confiscated.

This has largely to do with an administrative measure by regulatory and law-enforcement authorities and so ought to be handled in an administrative manner, as there is a change in goodwill towards private investors.

Psychologically speaking, the idea that there is something next to sacred in handling foreign exchange is a hangover from a past when any issuance of forex required allocation by the State House.

Those days are long gone. However, the reflexes are still with us, creating a huge matter from the margins forex traders obtain in the difference between purchasing and selling Kenyan shillings or US dollars.

Strictly speaking, though, it doesn’t differ much with buying and selling Serengeti Light or Coca-Cola, from the depot and then to the bar. A good boxer earns lots more in one night than a forex dealer across two months.

Portions of the regulatory and law-enforcement system have an issue with the bureaux de change on account of what is known as money laundering, dealing in drugs, or terrorism financing.

But small arms can be imported even by fishermen’s boats, with explanations relating to “terrorism” usually locally bred and not caused by intrepid travellers with bags of cash for would-be terrorists.

In any case, it is up to those charged with inspections to follow up any transactions at an individual level, rather than shutting down private forex business to aid, say, some commercial banks.

There is much we need to care about what the forex traders said in trying to show what needs to be corrected. For instance, that many of them – along with members of their families – say they suffered psychologically and otherwise following the 2018 crackdown.

Quite a few developed blood pressure challenges or heart conditions and were now laying all their hopes in the vision and sense of justice shown by the government, thus making a direct appeal for the president’s intervention.

Talks initiated with the Treasury, the Tanzania Revenue Authority (TRA) and other relevant agencies or authorities led to the “restoring’ of the traders’ licences but not of their seized assets.

Wooing Tanzanian and foreign investors is now easier than obtained previously – so long conditions improve on and on.

Foreign investment thrives on goodwill generally but much more specifically from the government and its agencies – among them the central bank, TRA and law-enforcement organs.

All these ought to speak the language, and do so unambiguously and assertively. Their efforts will likely fail if too many voices tell markets a different story.