The Sunday Mail
The mayhem, chaos and trauma that has been the order of the day on the black market has had devastating consequences for the economy. This is tragic.
We have been there and done that but we all know the consequences of an overly excitable parallel market.
We thank the Government for moving in on Thursday, announcing measures to bring back stability. Let us ensure this works.
We all know the consequences and effects of currency instability. We all know what this does to our number one enemy — inflation. In fact, through some of our scandalous activities, we have become our number one enemy.
As Zimbabweans, we are a happy, hospitable and resilient lot. We have withstood natural and man-made challenges but we somehow have a penchant to shoot ourselves in the foot at the most inconvenient time, causing us and the economy to limp again at a time it was gaining much ground.
This is outside any compelling factors.
What has played out on the parallel market, where rates doubled from $1 300 to the US dollar to about $2 600 in less than two months is stuff for horror movies. Which economy can sustain that?
Why scuttle the restorative efforts that have begun to see Zimbabwe attract capital, massive infrastructural developments, resuscitation of companies and all the works.
What economic fundamentals have caused this if not sheer greediness and an exaggerated demand for the usd as a store of value. Billions of rtgs dollars are being dumped onto the parallel market, increasing demand for the USD, hence raising the rates.
We are told that any trader with dollar power just pegs a rate to attract the most usd and can wake up with any figure as long as they achieve their desires.
But we need to stop for a moment to think about the contagion effects of our actions. The system, institution or individual causing this challenge needs not be that selfish and myopic but consider the bigger picture.
There are ways and means of making profits or accessing the usd in a sober, constructive and progressive manner.
There is the official market through the interbank and the foreign exchange auction market.
There have been complaints of late settlements of bids on the auction market but this appears to be a thing of the past. The central bank pledged to ensure timeous settlements and it is working.
The players on the parallel market justify their actions in certain spaces by saying they cannot get enough foreign currency on the official markets.
Some of the businesses contracted by Government are said to be offloading the portion they get from Government in rtgs onto the parallel market, fuelling activity there, hence the rising rates.
But we believe the new measures announced by the Minister of Finance, Professor Mthuli Ncube, will yield results in the short to medium term.
The removal of the 15 percent surrender requirements by firms should excite firms and trigger a rethink in terms of their participation on the illegal foreign currency market, while improved interest rates payment on long-term rtgs deposits and the duty-free importation of basic products should do the trick in stabilising the economy .
Of course, local firms feel hard done, particularly in terms of more competition set to be induced by the imports, but this is something they brought on to themselves in some way.
The price rises in recent months without much justification and shortages of some goods have left the consumer stranded, hence the need to look for alternative markets to bring price stability and ensure access to basic goods and services for the consumer.
Furthermore, the desire by Government to strengthen the local currency is understandable. Most salaries have been eroded by the rise in foreign currency rates on the unofficial market and this has had debilitating effects.
For instance, last month alone, salaries were decimated by more than 50 percent. This is harmful in that payment for most services is demanded in Usd. A case in point is rent. This means tenants must find the dollars or are made to pay in rtgs but at black market exchange rates.
Of course, Government would not allow such a situation to persist, hence the move to restore sanity in the marketplace.
Reports elsewhere in the paper that gold coins and lately the tokens have managed to mop up at least $40 billion in the last 10 months induce confidence in the economy. Much of this would have been dumped onto the parallel market, sponsoring more instability.
As market players, we need to sober up and consider carefully every step we take so that we serve the economy.
Policies being put in place are for the good of the economy and need to be supported by all stakeholders. They say a chain is as strong as its weakest link and any weak link, in this case the parallel market, has caused intended and inadvertent effects on the economy, some of which may result in long-term damage.
The National Economic Consultative Forum and other such platforms need to remind all stakeholders on the need to adopt strategies that build rather than destroy. The inflation battle in the country has been long and arduous, hence it is our responsibility as a collective to ensure we desist from any inflationary activity.
We are glad that Prof Ncube said, in coming up with the new measures, he had consulted most stakeholders.
This buy-in resulting from this should hold. A lot of positives are happening in the economy and we need, as a country, to safeguard all the gains registered so far so that we consolidate our position and value in the global marketplace. Any form of truancy needs to be dealt with expeditiously so that the economy is not out off track again.
Let us do business in the most decent and progressive manner so that our Canaan is not moved further away from us. The Second Republic has evidently put in place strategies to take the country forward and it is incumbent upon its partners to adopt a similar stance, both in public and in private. Decisions made in the dark will obviously not bring light to the economy. Nyika Inovakwa nevene vayo. The onus is on Zimbabweans to build this country. The sum total of our actions or inactions will hand us our tomorrow. Let us ensure it will be a brighter one.
In God I Trust!