Jacob Mafume: Price controls, tinkering with the deck while the titanic is sinking
By Jacob Mafume
Zanu PF mediocrity, lack of care for the people of Zimbabwe and their nauseating pursuit of patronage and self-preservation are the reasons of economic collapse in Zimbabwe.
An attempt to control prices is therefore tinkering with the deck while the titanic is sinking.
Several statements in successive press conferences by government officials including Kembo Mohadi are to the effect that Zanu PF has gone back to its default of price controls among other reactive and barbaric measures typical of a bunch with no proper understanding of elementary economics.
The people of Zimbabwe deserve better than a group of self-imposed leaders who are quick to make reckless announcements only good enough for the symptoms.
We in the MDC are aware that Zanu PF led by Mnangagwa does not want to take responsibility for its corruption and failure which has now resulted in economic meltdown and the suffering of the masses.
They play the blame game, blaming everyone except the trees and the stones. They blame the opposition for sabotage; blame shops for profiteering and blame the citizen for panic buying, surprisingly shortages include drugs in pharmacies.
Now productive time is being lost in fuel queues, food stalls and the search of now scarce basics like cooking oil. Electricity blackouts are also increasing by the day yet the business as usual approach seems not to go away.
Zanu PF has lost it.
With the above characterizing economic activity in Zimbabwe, the underlying assumptions for recovery are therefore non-existent. In this kind of situation a government which regulates consumer spending and control prices is a wrong government. It is a government which only worsens the situation.
It creates shortages, encourages the alternative market and subsequently exacerbates prices they are trying to control. The government must attend to its expenditure irregularities and provide supply side solutions.
We have also argued that the centre piece of any government policy must be restoration of production. Zanu PF’s failure to create conditions in respect of which the economy is grown and jobs are created will always harm this economy.
We further made the point consistently that the cash crisis, multiple exchange rates and the bullish trend in respect of the prices of the US dollar is a direct result of fiscal mismanagement.
The cost of the dollar is therefore the major driver of inflation. This cannot be corrected through institution of barbaric price controls and threats of revoking retail licenses.
We therefore propose the following solutions.
1. The government must design an Emergency Recovery Economic Plan supported by an Emergency Recovery Fund.(Creating such a fund will not be possible under a Zanu PF government)
2. Inject funds into traditional funds like DIMAF and ZETREF to revive distressed companies as part of supply side solutions.
3. The government must leave within its means, maintaining a primary balance is a hallmark of successful fiscal cycles.
4. Deal with the liquidity crisis including paying back the money stolen by the government at the RBZ which was kept in RTGS balances.
5. The government must construct itself out of the current crisis, by dealing with the infrastructure gap employment will be created and aggregate demand will also increase.
6. Initiate a sustainable debt clearance strategy and end isolation of the country by sincere re-engagement of the international community.
7. Combat corruption which has put a huge premium on the economy, the strategy must include regular life style audits for all top public officials.
8. Scrap the bond note, attend to fiscal hygiene and join the rand monetary union.
MDC: Change That Delivers
Jacob Mafume
MDC National Spokesperson
