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EDITORIAL COMMENT: Local currency solution to US dollar price madness

30 Jun, 2019 - 00:06 0 Views
EDITORIAL COMMENT: Local currency solution to US dollar price madness

The Sunday News

THERE is no doubt that the country had been plunged into a price madness influenced by what the Minister of Finance and Economic Development, Prof Mthuli Ncube, said was a process of “self dollarisation”, which had a negative bearing on the general population.

The prices of basic goods and services were shooting up almost every day due to the unprofessional conduct of some in the business sector who were in fact chasing the black market rate of the US dollar to the local currency. 

The move by the Government to step in and scrap the multi-currency regime on local business transactions was a bold step to ensure normalcy and also restore value to the local currency, and at the same time protecting workers from speculators who were taking advantage of the use of the multi-currency regime.

The country officially ditched the multi-currency regime last Monday after Government gazetted Statutory Instrument 142 of 2019, which restricts all domestic transactions to local currency terms. It is therefore time all patriotic Zimbabweans come together to support the Government initiative to bring normalcy in the business sector and also ensure that salaries earned by workers have value at the end of the day.

As pronounced by President Mnangagwa, the removal of the multi-currency regime marked the country’s return to normalcy. Briefing local and foreign journalists on the sidelines of the African Union-United Nations Wildlife Economy Summit in Victoria Falls last week, President Mnangagwa said the country had properly planned for the decision it took.

“The recent events were indicative of what was coming and what has come is that Zimbabwe has gone back to normalcy which is having our own currency. We were living in an abnormal situation and we said we will only move when fundamentals are correct, and we have moved because fundamentals to support the local currency are in place,” he said.

Posting on his Twitter account last week, President Mnangagwa added; “It has always been clear that for our economy to truly take off, we need our own currency. 

“While the multi-currency regime helped to stabilise the economy, it did not give us control of monetary policy and left us at the mercy of US dollar pricing which has been a root cause of inflation.

“When the majority earn in the local unit, but goods are priced in US dollars, the outcome will only ever be a two-tiered economy: stable and affordable prices for those with access to (US) dollars, while the majority face an unrealistically high cost of living. This is unfair and unsustainable.”

We also note that Zimbabweans have embraced the return of the Zimbabwe dollar and a majority of businesses, including those who were previously trading in forex, had indexed their prices in local currency.

Members of the public also expressed relief saying the multi-currency regime had become a haven for currency distortions and profiteering by unscrupulous businesses and cartels. 

“I think this is good considering that people were economically abusing us in the name of the United States dollar and rand. Everything is rated in forex and I think the new intervention will correct the market,” said Mr Effort Tarwirei, a taxi driver.

Confederation of Zimbabwe Retailers president, Mr Denford Mutashu, said his organisation fully embraced the local currency and supported measures to stabilise the interbank foreign currency market. 

He said pricing distortions arising from the inflated parallel market had left most Zimbabweans reeling and on the brink of total poverty. 

Zimbabwe Teachers Association (Zimta) president Mr Richard Gundane said the new policy should leave workers earning enough money to take care of their families.

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