Gov­ern­ment moves to quell eco­nomic dis­cord

The Manica Post - - Business News - Kudzanai Gerede Post Cor­re­spon­dent

EVENTS in re­cent weeks have seen Gov­ern­ment step­ping up ef­forts to nor­malise the dire eco­nomic sit­u­a­tion cur­rently grip­ping the na­tion af­ter busi­nesses wan­tonly raised prices of com­modi­ties be­yond the reach of many, Post Busi­ness can re­veal.

Since the be­gin­ning of Oc­to­ber, most ba­sic com­modi­ties have dis­ap­peared from shelves of many su­per­mar­kets trig­ger­ing sharp price in­creases by some busi­ness op­er­a­tors, which prompted Gov­ern­ment to in­ter­vene and quell the sit­u­a­tion.

While the scarcity of for­eign cur­rency in the coun­try that has crip­pled pro­duc­tion for most man­u­fac­tur­ers such as Delta bev­er­ages, cook­ing oil maker Wil­low­ton, Dairi­board and many oth­ers can­not be down­played there how­ever seems to be a de­lib­er­ate itch within some quar­ters of busi­ness to cap­i­talise on the sit­u­a­tion to un­jus­ti­fi­ably prof­i­teer.

On Mon­day morn­ing Pres­i­dent Em­mer­son Mnan­gagwa met key stake­hold­ers from busi­ness, in­dus­try and bank­ing to get an un­der­stand­ing of the cur­rent chal­lenges be­fore as­sur­ing the na­tion that they had found com­mon ground.

The re­cent com­mod­ity short­ages com­pounded by an acute rise in ex­change rates on the par­al­lel mar­ket saw con­sumers rush­ing to wipe their RTGS bal­ances, a sit­u­a­tion that fur­ther height­ened de­mand for most com­modi­ties.

Speak­ing af­ter his en­gage­ment with cap­tains of busi­ness, Pres­i­dent Mnan­gagwa as­sured the na­tion that Gov­ern­ment would in the short term se­cure ad­e­quate for­eign cur­rency to sta­bilise the fi­nan­cial mar­ket.

“While the coun­try is go­ing through dif­fi­cult times mainly be­cause of lack of for­eign cur­rency to meet the grow­ing de­mand for for­eign ex­change across all the sec­tors of the econ­omy, I would like to as­sure you all that the cur­rent mul­ti­c­ur­rency sys­tem is here to stay. All your

RTGS bal­ances at banks and bond notes in cir­cu­la­tion are safe and se­cure. There should not be any pres­sure to ex­change or off-load these bal­ances, as Gov­ern­ment pol­icy has not changed to war­rant such anx­i­ety,” he said.

Mar­ket watch­ers are how­ever wary of the three-tier pric­ing struc­ture that has seen most busi­ness op­er­a­tors re­vert­ing to buy­ing in the lo­cal bond note cur­rency or elec­tronic medium, which is more expensive com­pared to pay­ments in for­eign cur­rency.

On Tues­day, In­for­ma­tion, Public­ity and Broad­cast­ing Ser­vices, Cde Mon­ica Mutsvangwa told press af­ter the Cab­i­net meet­ing that Gov­ern­ment was in the process of craft­ing reg­u­la­tions to out­law the three tier pric­ing sys­tem while also com­mend­ing the amend­ment of

SI 122 that will al­low im­por­ta­tion of ba­sic com­modi­ties pre­vi­ously banned.

An in­ves­ti­ga­tion by Post Busi­ness has re­vealed that the avail­abil­ity of some com­modi­ties such as diesel, petrol and cook­ing oil is steadily im­prov­ing fol­low­ing the Gov­ern­ment in­ter­ven­tions.

On Mon­day En­ergy and Power De­vel­op­ment Min­is­ter Jo­ram Gumbo re­vealed that Gov­ern­ment had penned a deal with Sakunda and Trafigura that would see the two en­ti­ties sup­ply­ing the for­mer with 100 mil­lion litres of fuel up­front be­fore get­ting 50 mil­lion litres of fuel on a weekly from that deal.

Speak­ing to Post Busi­ness, eco­nomic an­a­lyst Pepukai Chi­vore said Gov­ern­ment in­ter­ven­tions to quell the sit­u­a­tion were com­mend­able and gave con­fi­dence to the mar­ket par­tic­u­larly with re­gards to the Pres­i­dent’s as­sur­ance on is­sue of ex­change rates.

“The Pres­i­dent’s state­ment has a bear­ing on mar­ket con­fi­dence. By merely pro­nounc­ing Gov­ern­ment’s com­mit­ment to stick­ing to the multi-cur­rency regime, deal­ing with the three-tier pric­ing sys­tem and sta­bil­is­ing RTGS bal­ances, Pres­i­dent ED’s words have a pos­i­tive im­pact on the mar­ket. Much of the panic by con­sumers em­anates from fears of de­val­u­a­tion of the RTGS bal­ances given the un­sta­ble trends on the par­al­lel mar­ket,” he said.

Gov­ern­ment ex­pects the im­pact of these in­ter­ven­tions to be felt by mid-Novem­ber.

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