The Sunday Mail
ZIMBABWE is on the cusp of yet another stellar performance in agriculture, as tobacco deliveries are expected to surpass the 2019 record of 261 million kilogrammes.
It is the latest milestone in a series of success stories in agriculture that have been recorded over the past five years.
In 2021, for example, maize production was more than 2,7 million tonnes, which was 200 percent above the 2020 harvest and about 130 percent above the 10-year average.
Again, wheat deliveries last year reached a record 375 000 tonnes, the highest since production of the cereal started in the 1960s.
Output of traditional grains such as sorghum and millet has also been rising.
This does not only boost incomes in rural areas, where the residents’ lives revolve around agriculture, but also leads to household and national
food security, as well as huge cost savings that result from import substitution.
It is estimated that Zimbabwe could have saved more than US$200 million by growing enough wheat to meet local demand.
Likewise, the mining sector has been performing more than expected, with export revenues soaring to more than US$5 billion in 2022, which compares favourably to the US$2,7 billion recorded in 2017.
With increased foreign currency inflows and a positive current account, the Government has been able to pay a significant chunk of its workers’ salaries in US dollars at a time when most companies in the private sector have been struggling to do the same.
The Government has also been able to extend a lot of concessions and incentives to stimulate re-industrialisation, considered critical in creating jobs and promoting economic growth.
For instance, since June 23, 2020, companies have been getting relatively cheap foreign currency from the auction.
Considering all these circumstances, it is difficult, therefore, to understand why and how the Zimbabwe dollar has been precipitously losing value against the US dollar.
While some experts would want us to believe that there are too many Zimbabwe dollars that are chasing goods in the market — the classical definition of inflation — this is hardly the case.
In fact, this is grossly insecure.
The Zimdollar is not as widely available as claimed, with most companies failing to meet their targets in local currency terms and, in turn, failing to adjust workers’ salaries, the majority of whom earn in the local currency.
Further, the fact that more than 70 percent of local transactions are in foreign currency, and business can now retain all their foreign currency from retail sales, means that there is a surfeit of US dollars in the market.
And the fact that business would still want to offload the local currency they might be holding to hoard
even more forex betrays unbridled greed.
Overall, it gives credence to Government’s claim that the depreciation of the local unit, and the concomitant price increases of basic commodities, has nothing to do with economic fundamentals — the health of the economy — but speculation, greed and rent-seeking behaviour.
And why this has to happen so close to the elections leaves more questions than answers.
But the lives and livelihoods of Zimbabweans cannot be used as pawns in a political game.
This nonsense just has to stop.
We are, therefore, comforted by President Mnangagwa’s free counsel for business, urging them to mend their ways.
Speaking to multitudes of first-time voters at a rally that was organised by Young Women for ED in Masvingo on Friday, the President was quite emphatic.
“We are aware of those bent on causing havoc in our country by attacking our currency; they will never succeed . . . We will remain united as a people,” he said.
“This wanton increase of prices and manipulation of the foreign exchange rate must stop. This morning, when I met the (Reserve Bank of Zimbabwe) governor (Dr John Mangudya) and the Minister of Finance (Professor Mthuli Ncube), I gave them instructions that we shall not tolerate this nonsense.
“Those who are going to be found wanting and commit crimes against measures we have put in place, we shall have their trading licences withdrawn, because these people are doing these heinous acts to cause suffering on our people. I now warn them . . .”
Again, this madness must stop forthwith.
Pricing madness: What goes around comes around
The Sunday Mail
ZIMBABWE is on the cusp of yet another stellar performance in agriculture, as tobacco deliveries are expected to surpass the 2019 record of 261 million kilogrammes.
It is the latest milestone in a series of success stories in agriculture that have been recorded over the past five years.
In 2021, for example, maize production was more than 2,7 million tonnes, which was 200 percent above the 2020 harvest and about 130 percent above the 10-year average.
Again, wheat deliveries last year reached a record 375 000 tonnes, the highest since production of the cereal started in the 1960s.
Output of traditional grains such as sorghum and millet has also been rising.
This does not only boost incomes in rural areas, where the residents’ lives revolve around agriculture, but also leads to household and national
food security, as well as huge cost savings that result from import substitution.
It is estimated that Zimbabwe could have saved more than US$200 million by growing enough wheat to meet local demand.
Likewise, the mining sector has been performing more than expected, with export revenues soaring to more than US$5 billion in 2022, which compares favourably to the US$2,7 billion recorded in 2017.
With increased foreign currency inflows and a positive current account, the Government has been able to pay a significant chunk of its workers’ salaries in US dollars at a time when most companies in the private sector have been struggling to do the same.
The Government has also been able to extend a lot of concessions and incentives to stimulate re-industrialisation, considered critical in creating jobs and promoting economic growth.
For instance, since June 23, 2020, companies have been getting relatively cheap foreign currency from the auction.
Considering all these circumstances, it is difficult, therefore, to understand why and how the Zimbabwe dollar has been precipitously losing value against the US dollar.
While some experts would want us to believe that there are too many Zimbabwe dollars that are chasing goods in the market — the classical definition of inflation — this is hardly the case.
In fact, this is grossly insecure.
The Zimdollar is not as widely available as claimed, with most companies failing to meet their targets in local currency terms and, in turn, failing to adjust workers’ salaries, the majority of whom earn in the local currency.
Further, the fact that more than 70 percent of local transactions are in foreign currency, and business can now retain all their foreign currency from retail sales, means that there is a surfeit of US dollars in the market.
And the fact that business would still want to offload the local currency they might be holding to hoard
even more forex betrays unbridled greed.
Overall, it gives credence to Government’s claim that the depreciation of the local unit, and the concomitant price increases of basic commodities, has nothing to do with economic fundamentals — the health of the economy — but speculation, greed and rent-seeking behaviour.
And why this has to happen so close to the elections leaves more questions than answers.
But the lives and livelihoods of Zimbabweans cannot be used as pawns in a political game.
This nonsense just has to stop.
We are, therefore, comforted by President Mnangagwa’s free counsel for business, urging them to mend their ways.
Speaking to multitudes of first-time voters at a rally that was organised by Young Women for ED in Masvingo on Friday, the President was quite emphatic.
“We are aware of those bent on causing havoc in our country by attacking our currency; they will never succeed . . . We will remain united as a people,” he said.
“This wanton increase of prices and manipulation of the foreign exchange rate must stop. This morning, when I met the (Reserve Bank of Zimbabwe) governor (Dr John Mangudya) and the Minister of Finance (Professor Mthuli Ncube), I gave them instructions that we shall not tolerate this nonsense.
“Those who are going to be found wanting and commit crimes against measures we have put in place, we shall have their trading licences withdrawn, because these people are doing these heinous acts to cause suffering on our people. I now warn them . . .”
Again, this madness must stop forthwith.
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