COMMENT: Robust approach will tame indiscipline in business

13 Aug, 2022 - 00:08 0 Views
COMMENT: Robust approach will tame indiscipline in business Reserve Bank of Zimbabwe (RBZ)

The Chronicle

The Government has always indicated that the fundamentals are sound for a stable economy.
Foreign currency inflows are high every year, often higher than larger economies such as Kenya.

The economy averages US$8billion in foreign currency receipts every year.  According to the Reserve Bank of Zimbabwe (RBZ), total foreign currency receipts from January to 30 June 2022 amounted to US$5.45 billion compared to US$4,07 billion received during the same period in 2021, representing a 33,6% increase.

It is possible that the sum could be double, even more, by the end of the year.

Mr George Guvamatanga

Ordinarily, an economy that generates as much foreign currency as ours does, does not lack it to the extent of having as huge a black market as we do.  An economy that generates that much in foreign currency will have stable currency.

However, the situation has been the other way.  The dollar has, unfortunately, been weakening since its reintroduction in early 2019.  The currency black market is flourishing too.

The source of the challenge, the Government always says, is indiscipline among businesses.  And perhaps, the Government not being as tough as it should be in cracking the whip.  The Government’s idea, which is very plausible, was to be guided by moral suasion in its management of the economy.

foreign currency

Unfortunately, the criminals in the business sector wrongly took authorities’ conciliatory stance as a weakness thus continued with their clearly criminal behaviour that harms the economy.

We have had large companies dabbling on the black market, and others pegging their prices on the parallel market rate despite consistently receiving foreign currency from the RBZ auction.  We, too, had companies contracted by the Government to supply certain goods and services, most brazenly submitting invoices that were indexed on black market rates and having the invoices processed.

money

Disrespect, indiscipline do not come any worse.

We cite the Permanent Secretary for Finance and Economic Development, Mr George Guvamatanga elsewhere in this edition complaining that some tourism operators are charging an equivalent of up to US$600 for accommodation and meals for a day based on the official exchange rate.  Some flight services are pegged at US$1 500 equivalent.

“This is not acceptable and it has to stop Your Excellency,” said Mr Guvamatanga at the Zimbabwe Economic Development Conference in Victoria Falls yesterday.

“Government ministries and departments would not be supporting such extortionate pricing.”
President Mnangagwa responded:

black market- Image taken from Shutterstock

“Your statement was loud and clear and we shouldn’t be having people doing this in our society, we don’t want our society as a nation to be constituted by such characters.  We have a duty as citizens of our nation to play fair and be remembered for building our country and not destroying it.

It’s unfortunate that what he said is happening in Zimbabwe, if he said it in China we’ll be having candidates for execution. But in Zimbabwe I as the President don’t want the death penalty and we need to find other means of punishment.”

It is clear, from the President’s remarks yesterday, and a number of times before, that the time for economic indiscipline is up.

Yes, execution of economic saboteurs can be extreme.  In China, as the President said, such crimes have attracted the ultimate penalty since time immemorial.

President Mnangagwa

For Zimbabwe, it will be impossible to follow that line at this late stage but a no-nonsense approach will engender the discipline that is needed to build an economy that benefits everyone, not one in which thieves, street dealers and saboteurs masquerading as formal businesses think they are smarter than everyone else.

We have no doubt that the masses who have had their lives rendered unlivable by criminals in business for so long are in full support of the new robust approach that the Government has adopted to tackle indiscipline on the market.  With greater discipline in the country, our economy will be prosperous again and Vision 2030 achieved four years in advance.

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