Monetary policy must address pricing crisis

The monetary policy to be delivered by Reserve Bank of Zimbabwe Governor, Dr John Mangudya, today should address events of the past few weeks that saw prices of some basic commodities being increased.

The RBZ should be clear on how it is going to deal with the unwarranted price increases on basic goods, a situation that has left many dumbfounded.

Ordinary people, whose incomes are already eroded, have been failing to cope with the price increases that have added more pressure to their purse.

The downside of these price increases is that they come at a time no employer is prepared to increase workers’ salaries, citing the economic environment under which businesses operate.

What this means is that it is the workers and the ordinary people, who are already struggling to make ends meet, that are being affected by these price hikes.

Retailers should be made to account for every price increase they effect and convince the authorities that the hikes are necessary.

But events of the last few weeks clearly demonstrated that unscrupulous retailers have been increasing prices unilaterally, as they focus on attaining higher profit margins.

Our observation is that the price increases are not justified in most instances, considering that the RBZ has been availing foreign currency to some retailers.

The monetary policy today should be able to address this problem and come up with measures that will ensure retailers revert to old prices, or at least justify why the increases have to be effected.

We expect the RBZ to summon all instruments at its disposal to ensure that retailers do not burden their customers with unjustified price increases. Gone should be the days when some people connive to increase prices without a justifiable cause.

Business should not be solely concerned with maximum profits, without considering the state of the economy and the low buying power of their customers.

Dr Mangudya’s monetary statement should put to rest speculation in the economy that has seen some people making business decisions based on such conjecture.

We also expect the monetary policy to give us pointers as to what the authorities are doing with regards to ending the shortages of cash, especially foreign currency.

This has been the reason cited by some businesses which have increased the prices of goods. Some of these businesspeople claim they are following trends on the foreign currency illegal market whose kingpins have been increasing their rates on a daily basis.

We believe that Zimbabwe has gone past the days when activities by criminals on the illegal foreign exchange market controlled our daily lives. This situation is untenable and we cannot afford it any longer. That is why we expect Dr Mangudya to tell the nation in his Monetary Policy Statement what the RBZ and Government are doing to ensure we return to the days when people could withdraw foreign currency from their bank accounts.

The monetary policy should support President Mnangagwa’s mantra that “Zimbabwe is open for business”.

We need a conducive environment in which foreign investors will not hesitate to pour in their funds, assured that the fundamentals are correct enough to ensure they can make money in Zimbabwe.

The ability of our economy to support new investments will determine how quickly we will realise the dream set by President Mnangagwa to attain the upper middle-income status by 2030.

The correction of the fundamentals should start today with the monetary policy to be announced by Dr Mangudya.

Everyone is eagerly waiting for this monetary policy because it comes at a time when quick solutions are expected on inflation and cash shortages.