Zimbabwean non-governmental organisations (NGOs) claim their operations have been paralysed since the Reserve Bank raided their foreign currency accounts (FCAs).

In his mid-year Monetary Policy Statement at the beginning of October, Gideon Gono, governor of the Reserve Bank of Zimbabwe (RBZ), said NGOs would now maintain 'mirror accounts' that would reflect how much money they had in the bank while the actual money would be kept by the RBZ.

Under the new arrangement NGOs have to seek the reserve bank's permission to use their money. NGOs who spoke to IRIN said many of their programmes had ground to a near standstill, as the central bank was taking as long as 3 weeks to approve the release of foreign currency.

In justifying the swoop on NGO funds, Gono said the move, which affected all corporate FCAs, had been taken to ensure "judicious allocation of the scarce foreign currency reserves", besides boosting exports.

"What this means is that with immediate effect all corporate foreign currency account balances at authorised dealers are to be lodged at the Reserve Bank of Zimbabwe, such that each bank maintains mirror accounts for transactions tracking purposes," he said.

"It is important to note that while individuals, embassies and international organisations' FCAs will remain with authorised dealers, balances for all non-governmental organisations are to be transferred and centralised at the Reserve Bank." FCAs belonging to UN agencies were also spared.

In return, Gono offered a range of investment deals in the "spirit of preserving and promoting the welfare of our generators of foreign currency, who are the geese that lay the golden eggs."

Predictably, the NGO community is concerned about these developments.

Control over programmes

Fambai Ngirande, communications and information manager of the National Association of Non Governmental Organisations (NANGO), an umbrella body for all NGOs operating in Zimbabwe, told IRIN an emergency meeting was held by members after the announcement.

"At the meeting there was speculation that the reserve bank would end up deciding on behalf of NGOs whether programmes being undertaken were relevant or not," he said.
"Another concern was that the Reserve Bank of Zimbabwe would end up taking over foreign currency belonging to NGOs from the FCAs at compulsory exchange rates, in line with the spirit of the Indigenisation and Economic Empowerment Bill." The bill intends to ensure at least a 51 percent shareholding by indigenous black people in most businesses.

Several NGOs that spoke to IRIN said although it was initially implied that the RBZ would take only 2 days to approve NGO funds, delays of between 2 weeks and up to a month were being reported.

"There are concerns regarding the inexplicable delays on money transfers. Some NGOs mentioned 2-week delays, while others said traveller's cheques for NGO officials travelling across the world for meetings were being turned down," said Ngirande.

An NGO working in the food-security sector is still waiting for approval of a request for funds for research on the levels of nutrition among children in rural areas.
"It has been 3 weeks since we submitted our request for our money. Our problem is that we cannot speak out because we could be deregistered, but the truth of the matter is that the welfare of thousands of children is being compromised by the takeover of FCAs by the Reserve Bank," said a senior official of the NGO.

The NGOs said they were suspicious about the move targeting them amid regular attacks by the government, which accuses NGOs and civil society of supporting the main opposition party, the Movement for Democratic Change, and of using their resources to campaign on behalf of the opposition.

Although the official exchange rate is Z$30,000 to US$1, on the illegal but thriving parallel market US$1 is fetching Z$1.5 million.

Two years ago, President Robert Mugabe did not assent to the NGO Bill, which, among other things, sought to control funding destined for NGOs. The bill was brought before parliament amid strident accusations that NGOs were supporting the opposition.

Election ploy?

An official of a human rights NGO told IRIN that the reserve bank policy appeared to have been designed to frustrate their operations. "There was a huge outcry when the government tried to deregister NGOs through the NGO bill, but it is our belief that the current move is designed to ensure that we do not operate to expected capacities," the official commented.

"There appear to be punitive measures against the NGO community by the government through the central bank. Strangely, the policy was announced a few months before next year's elections."

An official at a commercial bank, through which requests for foreign currency are made by NGOs, said the RBZ demanded to know three issues: "The RBZ insists on knowing the identity of the NGO, the amount required and who the beneficiaries are, before processing the requests."