Government moves to quell economic discord
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.