It’s true Prof Mthuli Ncube has managed some level of economic stability as measured by the inflation figures on a downturn, exchange rate stability, and significant improvement in the financial sector. However, there remains a gap between what happens in the formal economy and the informal economy. Questions remain on the parking bay on why there remains a fissure between these two markets in terms of pricing of goods and services; why there remains three-tier pricing in the market and why our Zimbabwean dollar remains relatively and reluctantly acceptable in the market and why he actually fails to command the black market.
Firstly, Prof Ncube is failing to account for the flow of currency from sources like Mukuru, Worldremit, Western Union, and other financial organizations that receive foreign currency. The Prof is failing to attract these foreign currency injections into the formal economy, making his auction system questionable. In my view, if the exchange rate in the currency auction floors was lucrative, everyone else would rush with the currency to the auctions for the highest bidders. So, something remains sinister in the auctions to the extent that the supply of forex remains depressed. One questions whether the exchange rates are determined by the demand and supply principles. This sees more forex being channeled into the black market where the exchange rate is free-floating.
Prof Ncube is failing to stop the black market of currency. He is failing to nab the street vendors out of the streets. He is failing to establish a vibrant banking system that would make all businesses banked. Again, he has to address the banking sector challenges that make the private sector unwilling to bank their cash but instead rushes to buy foreign currency from the black market other than buying it from the auction. One would question why our businesses don’t want to work with the banking sector. Instead of, “Zvinhu zvakarongeka,” I see, “Zvinhu zvingori manyama amire nerongo.” A lot of disorders in the running of the economy.
His failure to align the exchange rate has resulted in the haphazard pricing of goods and services. The business sector milks the formal workers heavily since they cannot access cash from the banks. They are bound to buy using mostly EcoCash whose charges, coupled with the 2% intermittent tax erodes the workers’ purchasing power. I am not sure why he seems blind to the fact that it is cheaper to do business using liquid cash than virtual money. Unfortunately, as presented before, it affects government workers whose welfare he should superintendent. The private sector that is not banked survives the hook because they transfer the burden wholly to the buyer by charging very high costs of transactions.
Prof Ncube needs to be schooled on how he should reinvigorate the productive sector. All his efforts, if any, are marred by corruption and a lack of prudence on the part of those who must finance the productive sector. It seems cheaper for those who access finances to import than to produce. It points to the lack of supervision of the private sector that accesses finances, more so corruptly yet to use it in unintended destinations. If the productive sector was morally poised to use the funds and produce, our propensity to import would be depressed in favor of exportation, driving our balance of payments in the right direction culminating in an appreciation of our currency. Oops! Our Professor should be live to the fact that the money he channels to the so-called productive sector goes to buy mabhero. We thus remain in an import trap.
For a better way forward, our Professor should stop parroting, “Zvinhu zvakarongeka,” yet failing to annex parallel pricing, parallel exchange rates, and a parallel economic system that cultivates parallel access to fortunes. The Minister should see his governance bringing sanity to the banking sector so that it motivates the business sector to be banked. He must be genuine in his auction system of managing the exchange rate and interbank rate. These should be transferred into prudential and ethical business practices. All we need is equitable treatment of every economic agent. He must go and awaken his counterpart in the Ministry of Home Affairs, who is busy snoring while his ministry is drawing the country to a standstill through corruption and smuggling guns to steal from the citizens they should protect.