The government has suspended payments to its contractors as part of efforts to rescue the depreciating Zimbabwe dollar that is fueling hyperinflation.
The Permanent Secretary of Finance and Economic Development George Guvamatanga directed government ministries, departments and agencies to suspend the payments.
This comes after the Treasury noticed that the contractors were submitting invoices of cash for goods and services using parallel market rates.
Guvamatanga said Ministries, Departments and Agencies (MDAs) are required to seek approval from Treasury for current and future contract pricing and share with it their due diligence on existing charges. He said:
Such a pricing framework by the suppliers of goods and services has not only been causing inflationary pressures but also parallel market activities.
This has resultantly caused instability in the foreign exchange market characterized by unnecessary movements in the rate resulting in exorbitant prices being charged.
In July, the government announced measures to deal with contractors who were allegedly channelling funds to the black foreign currency exchange market.
Finance Minister Mthuli Ncube warned that the suppliers concerned, their directors and related companies will be blacklisted with the Procurement and Regulatory Authority of Zimbabwe and will be banned from participating in any government tenders.
Meanwhile, the move to suspend payments to government contractors adds to others announced this year to stabilize the currency and curb inflation.
These include lifting the key interest rate to 200% from 80% in June, reintroducing the US dollar as legal currency, selling gold coins and potentially setting up a currency board.