Call on Government to address currency issues urgently

Prosper Ndlovu, Business Editor
GOVERNMENT has been urged to closely engage the private sector to sanitise the relationship between the United States dollar and the bond note so as to exhaust the currency argument and restore price stability in the market.

Association of Business in Zimbabwe (ABUZ) chief executive officer, Mr Victor Nyoni, said in an interview that the mismatch between official exchange rate and the prevailing parallel market one has become a source of discord in the economy, resulting in the spate of price increases.

Although the official exchange rate remains US$1:1RTGS/bond note, businesses have pegged prices of basic goods and services three to four times higher, responding to parallel market forces.

The increase in prices has eroded consumer spending on the back of spiralling cost of living.

“The biggest elephant in the room is the relationship between bond notes or RTGS and the US$.

“This has created a problematic pricing structure in the economy, we are faced with a black market reality, which is different from the official position,” said Mr Nyoni.

“As businesses we are saying the currency issue needs to be addressed urgently.

“We need to exhaust this argument once and for all for this economy to take off. As businesses we have said the US$ is expensive for this economy and we need to adopt a softer currency. There has to be a robust engagement with Government on this.”

As the country moves to 2019, Mr Nyoni said Government, working closely with the private sector, should tackle the currency challenge head-on and chart a clear path towards economic stability.

He further warned that unless the situation was addressed it will continue to suffocate businesses and impede new investments.

“The market is rejecting the bond note and that shows we cannot run the economy on the basis of regulation alone. Mthuli Ncube (finance minister) has earlier indicated he would rather not have bond notes or US$,” he said.

“We have companies selling products in bond notes or RTGS but having to pay raw material and equipment suppliers in forex.

“Such firms have to increase prices to cushion themselves. This is affecting manufacturing, mining and tourism.

“Let’s sanitise this currency argument as it is causing confusion on the market.”