‘Government stubbornness is worsening economic crisis in Zimbabwe’

Analysts have accused President Emmerson Mnangagwa’s administration of being “stubborn” noting its refusal to implement proposed measures to end the skyrocketing financial and economic crisis by economic stakeholders.

This comes after the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya dismissed a Confederation of Zimbabwe Industries (CZI) position paper that warned that the Zim Dollar was on the “brink of rejection in the face of exchange instability and increasing inflation”.

CZI also urged the central bank to suspend the foreign currency auction system after the Zim Dollar fell to ZWL350 against the greenback whose official interbank rate stands at ZWL159 against US$1.

But Mangudya, in response, issued a strongly worded statement that the auction system would remain because suspending it would cause shortages of goods on the market and abet inflation.

In an interview with Nehanda Radio, renowned economist and former economist in the Ministry of Finance Masimba Manyanya castigated the government for refusing to take the CZI ideas.

He further argued that it was “stubbornness” on the part of the government that makes it behave like it has the “monopoly” of economic ideals.

“We had this foreign exchange management problem for quite some time. There is enough evidence to prove now that this is emanating from specifically the failure of the government to deal with issues as they emage and as stakeholders are presenting them to the government.

“Look, economic policy is not something that is dictated. Command economics does not work. In a scenario we find ourselves in in Zimbabwe, it is important for the government to stop hiding its head in the sand and start addressing issues as they emerge and stakeholders are actually presenting issues,” he said.

He added: “It is this stubbornness in government that is the primary cause of some of the very serious challenges that we are facing. Not just in terms of foreign exchange management but in terms of the economy at large.

“Managing different sectors of the economy. The economy requires understanding between stakeholders and a desire by the government to take on board some of the suggestions and views that are being made towards managing the economy in a way that actually protects the interests of different stakeholders.

“It is quite wrong for the government to be stubborn and to be stiff headed and for so many years to continue to behave as if they have a monopoly of ideas on how to manage when we all know that so many submissions were made around the flaws in the auction system.

“And the recommendations by CZI, in the recent standoff between that organisation and the RBZ, they note quite clearly that the foreign exchange system is flawed and they recommend that we need an independent player to manage that.

“Then, we have the issue of mono currency. I think we are all familiar with the debates around this one.”

Manyanya accused the Zanu-PF regime of driving the mono currency debate for very political reasons rather than economic reasons.

“This is a very serious issue because we don’t have the international reserves to support a strong domestic currency. It is quite baffling to see the government going into overdrive to try to get this done.

“What is best for the economy now is to listen to what stakeholders like CZI are saying and then we allow a graduation from where we are towards a mono currency needed.

“So that we don’t continue to pile pressure on prices and on inflation because it is undermining the ability of households and workers to save money. And it’s removing from consumption some of the fundamentals, the access to important goods and services that the population needs.

“So, it’s quite disruptive, the approach that is being given by the government.

“If you ask me about the primary or root cause of this chaos that we find in the foreign exchange management sector, I will point directly to the government and say the government is just being stubborn,” he said.

Manyanya further noted: “It brings us back to what guys like Godfrey Kanyenze, the Labour and Economic Development Research Institute of Zimbabwe had been saying for quite some time that, ‘Zimbabwe’s economy is a casualty of bad politics’. Nehanda Radio