Zimbabwean New President Emmerson Mnangagwa. Picture: REUTERS/PHILIMON BULAWAYO
Zimbabwean New President Emmerson Mnangagwa. Picture: REUTERS/PHILIMON BULAWAYO

Harare — Zimbabwe’s new President Emmerson Mnangagwa has opened a three-month amnesty window for the return of public funds and monies illegally stashed abroad by individuals and companies, he said on Tuesday.

On the expiry of the amnesty at the end of February next year, the government will arrest and prosecute those who failed to comply, Mnangagwa said in a statement.

This came as the street price of hard currency in Zimbabwe has dropped more than 30% since Robert Mugabe was ousted as president last week. One US dollar cost the equivalent of $1.30 in Zimbabwean bond notes on the black market on Tuesday, down from $1.90 on November 20, according to street traders who quoted prices to Bloomberg.

Zimbabwe doesn’t have its own currency, with the government adopting a basket of foreign currencies including the US dollar and South African rand as legal tender in 2009 after hyper-inflation rendered the local dollar worthless. A bond note is an instrument issued by the central bank that is, in theory, pegged one-to-one to the dollar.

"The markets had over-priced as investors and other market players had been hedging themselves against a possible hyper-inflationary outlook," said Welcome Mavingire, managing partner at Intellego Investments Consultants in Harare. "Now that there is optimism about the economic outlook emanating from the new political dispensation, those fears of hyper-inflation have dissipated, hence, naturally, the markets had to self-correct."

Mnangagwa took office as Zimbabwe’s new president with a pledge to revive the economically distressed country. Mnangagwa, who replaced Mugabe after he resigned on November 21 to end 37 years in power, is facing many challenges, including a 90% jobless rate, a severe cash shortage and crumbling public infrastructure.

Before the change of power, Zimbabweans had piled into assets, including real estate, hard currency and US dollar-denominated stocks, as a store of value, Mavingire said. "More confidence also entails less people willing to hold foreign currency and other real assets as a hedge, and others who were holding on releasing them back into the market, hence the prices coming down," he said. "Foreign-currency rates are already tumbling on the unofficial markets with premiums of about 30% being quoted for transfers, down from about 80% a week ago."

Mnangagwa has urged western nations that have imposed sanctions on Zimbabwe to reconsider their measures and said his government was committed to compensating farmers whose land was taken under a Mugabe-backed expropriation programme.

Reuters/Bloomberg

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