Economic analysts have warned the government against imposing price controls, as the local currency literally loses value on daily basis, amid the skyrocketing of prices of basic commodities.
According to market watchers, any attempt by government to control prices will see basis commodities disappearing from the shops.
Retailers last week hiked prices as they chased the black market foreign currency exchange rate, which is now reportedly hovering between $3 500 and $4 000 to the United States dollar.
The government warned companies that are hiking prices, amid fears that it might be tempted to impose price controls.
“Worthless currency; back to 2008 settings except that goods are available in shops at extremely expensive prices. Any attempts to control prices will see these goods varnishing!!” Says Dr Pedzisai Ruhanya.
Many have been left wondering if this sabotage by business or not.
Former Herald editor Caesar Zvayi says:
“Indeed, this madness must stop. I do not know how but it can not be allowed to continue just because its election season!”
One market watcher, Kuda Mugova says:
“I understand your concerns. Yes, well earn a lot of forex as a country but it is not all in the control of the central bank. The RBZ only controls around 20%-30% of exports ( when you factor in concessions).
“Last year’s export earnings were US$7.4 bn and RBZ might have retained about US$ 2 bn. The auction system allotted US$1.1 bn. .
“The RBZ controls only about US$2 billion of the forex earnings. We don’t know how much they used to pay back loans from facilities
“What we are sure of is that the RBZ hardly has reserves because they only managed to clear backlogs recently.
“All other forex earnings of US$11 Bn are spent in forex or kept US$ in banks (including the mattress bank). Other reasons are;
1. There is no need for one to exchange them to spend locally.
2. No one trust the RBZ will be able to give you the forex when you need it. The auction system is exclusionary. The RBZ has not reserves of its own.
3. The ZW$ is a fast depreciating.
4. Firms pay tax and services in US$.
“Remittances are not staying the in the banking system but only passing through the formal banking system to the mattress bank. Although some comeback through payment of services that are exclusively in forex like fuel, passports and etc.”
Meanwhile, former Zanu PF legislator for Chivi South Killer Zivhu has blasted Zimbabwean prophets for failing to foresee that inflation will rise rapidly:
“Zvimaporofita zvose zvinoda shamhu ine munyu, seyi musina kutaura kare kuti inflation ichakwira kudaro, basa kutaura nhemha chete, hanzi nhingi ndiye wanzi na Mwari achahwinha ma elections, useless Prophets and clueless church leaders, God will brai you with fire.”
A murakashi only identified as William supports the position taken by business:
“I with businesses on this one. The issue is on the stability of the ZWL. If the rate depreciates by 50% in one month, then pricing and restocking are a challenge.
“Measures should be put in place to stabilise the currency otherwise businesses will sell for hard USD.”
Apparently, President Emmerson Dambudzo Mnangagwa’s spokesperson George Charamba says the country’s economy is now fully dollarised.
Charamba says it doesn’t make sense for businesses to claim that they are hiking prices because they are sourcing forex from the black market.
“DOES IT MAKE SENSE? That businesses tell us they are hiking prices because they are sourcing foreign currency in the black market?
“Meanwhile 80% of all transactions in Zimbabwe are in FOREIGN CURRENCY, making this ECONOMY virtually fully dollarised.
“Yarn yekuti you are sourcing forex in black market when 80% of your sales are in forex? And who is selling forex in the so-called black market anyway, and in huge figures to attract corporates? Tasvinura!!!!!” He queried.
Writing in his weekly column in a State-owned newspaper yesterday, Mnangagwa said government came up with several measures to stabilise the economy in “good faith”, but was being betrayed by the business sector.
“We even wonder if at all we are dealing with business anymore or with the politicians disguised as company executives seeking a political upset.
“Equally, politicians seeking to engineer market failures for definite political outcomes will be dealt with as politically opponents and through rules of appropriate politics,” Mnangagwa said.
“We are even aware of certain businesses deliberately disabling point-of-sale gadgets to force the consumer to buy key goods in one currency, contrary to the laws of the land.
“Any business practices which suppress the use of any currency recognised by our laws are both illegal and do undermine this unique and most favourable position which is found nowhere else in the world.
Zwnews
