Zimbabwe News and Internet Radio

Bulawayo hails Monetary Policy Statement

By Tendayi Madhomu

The business community here last week hailed government for floating the exchange rate but urged policy-makers to move with haste to fully operationalise the interbank market.

Minister Mangaliso Ndlovu
Minister Mangaliso Ndlovu

Last month, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya liberalised the foreign exchange (forex) market by allowing the RTGS dollar to freely trade with other units making up the country’s basket of currencies.

Business leaders who met with Industry and Commerce minister Mangaliso Ndlovu in the second capital last week applauded government for finally coming to terms with the reality that the United States dollar was hardly at par with the local currency.

They, however, pleaded with government to liquify the interbank market with hard currency so that businesses do not have to stray into the black market for forex.

Alternately, they argued government must repeal laws that punish those caught trading forex on the black market.

Addressing questions from the floor, Ndlovu said it was too early to form judgments on the interbank market.

The Industry minister said he is in agreement with Finance minister Mthuli Ncube and Mangudya that there was need to avoid fixing the exchange rate, noting that the rate should be market-oriented.

“Yes it (the interbank market) has not worked smoothly but it is still early days and we should give it time. Zimbabweans are always averse to developments; we always start by resisting.

“I hope there will be a lot of trading taking place in that market in a few weeks to come. It is still too early to make conclusions as we might come up with measures that will frustrate the progress made so far,” said Ndlovu.

Zimbabwe National Chamber of Commerce Matabeleland chapter vice chairperson Brighton Ncube said there was need for government to consult businesses before making key decisions and announcements.

He said industries were suffering due to policy inconsistencies, adding the unfavourable political atmosphere and corruption had increased the country’s risk profile.

Ncube also said there was need for government to give a regular update on how the proceeds from the two percent tax, introduced in October last year, on electronic transactions were being utilised.

Confederation of Zimbabwe Industries’ Matabeleland chapter president Joseph Gunda said despite the introduction of Statutory Instrument (SI) 122, prices of commodities have remained beyond the reach of most consumers.

“Prices are still high, they have not gone down. We need protection; perhaps there is need to review the policy. Was it not supposed to be temporary?” he said.

He bemoaned the obsession with profiteering by most retailers, hinting that was only afflicting the already struggling consumers.

Gunda said the violent looting by the Bulawayo community in January was a message to retailers and manufacturers that consumers were grossly affected by the overpricing of goods in the outlets.

He further said despite the provisions made in the recent monetary policy statement, very few if any companies had been able to access foreign currency from the commercial banks.

“We need to implement policies fully; members of the business community are going to the bank but they cannot access forex. Soon we will be forced to go into the forex black market and prices will remain high,” he said.

Ndlovu said government was forced to maintain the SI 122 instrument to curb the previous experiences where products had dried up in the market; a situation which presented a security threat as consumers scrambled for goods before they were even off-loaded from delivery trucks. DailyNews