Business

Remove foreign currency transit limit

TRYNESS TEMBO, Lusaka
BUREAUX de Change Association of Zambia has called on Government to expedite the process of scrapping off the US$1,000 limit for individuals transiting in foreign currency to allow the sector to grow.
Currently, the Bank of Zambia (BoZ) only limits an individual to transit in foreign exchange amounting to $1,000 per day.
Association president Paul Kalumba said BoZ has computerised the operation of all bureaux to monitor their transactions.
“The biggest challenge remains the over-regulation of the sector. Trade with walk in clients is still limited to US$1,000 per day per individual. This is only unique to Zambia. However, since BoZ now has an effective and efficient way to monitor the Bureau de Change sector, we expect this regulation to fall away.
“This has given all bureaux that have never had a system a free platform for their managers to effectively supervise their entities through the online system,” he said.
Mr Kalumba called on Government to allow bureaux to buy foreign exchange from any legal entity because currently, bureaux are restricted to buying their foreign exchange from banks and walk-in individuals only.
He said companies such as mines, sell their foreign exchange to banks that in turn add a mark-up and sell to the bureaux for onward selling to the public at an added mark-up.
Mr Kalumba said allowing bureaux to directly deal with corporates will pass on benefits to end users because the mark -ups by the banks will be avoided.
He said bureaux in Zambia are restricted to margins of two percent or less.
“Our association carried out a study in Tanzania, Kenya, South Africa, United Arab Emirates, United Kingdom and United States of America. In all these markets, no such restrictions exist. We found that on average, bureaux made around five percent margins in other jurisdictions, with UK bureaux making as high as 14 percent at airports,” he said.

Facebook Feed

Ad1