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Leonard Ncube, Victoria Falls Reporter
CALLS for restoration of deposit interest rates in the banking system to give value to savings and restore confidence in the local currency took centre stage yesterday at the ongoing Zimbabwe Economic Development Conference (ZEDCON) here.

The Ministry of Finance and Economic Development is hosting ZEDCON which will be officially opened by President Mnangagwa this afternoon.

Delegates are drawn from the academia, researchers and Government officials and they expressed concern that the country’s banking sector had become transactional, focusing largely on profit making thereby contributing to citizens and businesses’ lack of confidence in the financial services.

Participants called for restoration of confidence, especially paying interest on savings and returning the auction system to its intended original system as well as interrogating causes of the runaway exchange rates and hyperinflation.

Chief Director Curative Services in the Ministry of Health and Child Care Dr Maxwell Hove said there is a need to restore people’s confidence in the banking system.

“People need to have confidence for them to take money to the banks whose fundamentals should be to ensure that the money is safe and can be withdrawn at any time and also one can earn interest. Currently people are charged a fee for taking their money to the bank.

“The banking system has moved from its fundamental role to transactional banks which is why people keep their money at home. Let’s bring back the deposit interest to build confidence so that people can bank their money,” said Dr Hove.

He said dollarising the economy is not feasible as this has failed before.

Zimbabwe adopted a multi-currency system in 2009 before resorting back to dual currency with introduction of the RTGS.

A researcher, Ms Victoria Masere from Midlands State University said Zimbabwe suffers from policy inconsistency.

“Policy inconsistencies is the big elephant in the house. We can’t have policies that come and get reversed,” she said.

Senior economic advisor in the Ministry of Finance Professor Ashok Chakravarti concurred on the need for consistency in policy making.

He, however, warned against a radical approach when addressing challenges emanating from the banking sector.

“It’s true that banks have become transactional but we can’t force them, we need to treat them in a reasonable manner. The solution is policy consistency, we need a normal interbank market as opposed to the silo system that Zimbabwe banks operate in,” he said.

Finance Minister Professor Mthuli Ncube said ZEDCON is a unique platform for evidence based consultations to deepen policy making and implementation.

He acknowledged the concerns saying he will take up the issue with the financial institutions for them to play their full role.
“This is an important point which I will then take up with the banking sector and see how best we can work with them to improve their role as deposit taking institutes giving a fair reward to savings at the same time ensuring charges are not too high,” said Professor Ncube.

He said the discussions have been informative on fiscal and monetary policy issues, industrialisation, and value addition among others.

The Minister said a lot of ground had been covered by the discussions to shape the road towards crafting the 2023 National Budget.

“This is the first conference we have put together as a Government to bring critical stakeholders to share with us hard evidence on the ground on the impact of the current policies and what we should be doing towards improving the policy making process in the country.

“This conference is really unique in that it is evidence based and aimed at evidence based policy making designed to improve policy dialogue and policy making towards crafting of our budget and towards achieving Vision 2030 through NDS 1,” said Prof Ncube.

He said in the past, policies were as a result of consultation but the new approach is now deepening and doing actual hard scientific research in terms of assessing what has happened in the past and then using that to fine-tune policies.

“This is just deepening our consultation processes with scientific evidence,” said Prof Ncube
The conference theme is: “Accelerating Economic Transformation through Evidence Based Policy Formulation.” -@ncubeleon