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Mr Denford Mutashu

Kiyapili Sibanda, Business Reporter
THE financial services sector should come up with incentives to build confidence and entice the informal sector to bank their proceeds.

Confederation of Zimbabwe Retailers (CZR) president, Mr Denford Mutashu, said the prevailing market indiscipline and informality was symptomatic of depletion of trust between business stakeholders, especially with banks.

“I think market indiscipline and lack of trust and confidence between the banking sector, business and the public caused banks’ failure to meet cash withdrawal requirements on demand even though it is not their fault. Some of these factors have fuelled the thriving black market,” he said.

“There is a need to provide incentives to informal and formal business to persuade them to bank. This requires high levels of trust and confidence building between the financial services sector, business and the public.”

Mr Mutashu said Zimbabwe needs home grown solutions to reverse high import dependence, low levels of local production and the persistent liquidity problems bedevilling the country.

“The short term solution is to expedite request for additional Afrexibank export support facility to ensure continuous generation of foreign currency through incentives to exporting companies,” he said adding that it was disturbing that most companies have resorted to buying foreign currency at a premium of around 18-24 percent.

As a result, Mr Mutashu said hard cash was now easily accessible on the black market, a situation that does not favour economic growth in the country.

“The three-tier pricing is illegal, yet rampant due to market indiscipline and there is a need also to locate the root of it as it did not just arise from nowhere.

There is growing mistrust and a lot of work has to be done to eradicate it.

“The Government should also work to improve internet connectivity across the country and especially to the rural communities,” he said. — @Kiyaz_Cool