Online Reporter
Business Reporter
THE Confederation of Zimbabwe Industries (CZI) has welcomed most of the measures in the 2025 Monetary Policy Statement (MPS), however offering its suggestions on aspects areas it says need to be refined.
Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu presented the 2025 MPS on February 6, 2025, which he said was focussed on consolidating stability and supporting economic growth, premised on several interventions.
Finance and Economic Development Minister Professor Mthuli Ncube projected in his 2025 National Budget that the economy will grow by 6 percent, largely driven by the recovery of agriculture following the impact of the El Nino-induced drought last year.
CZI commended the central bank for implementing measures, including the Zimbabwe Gold (ZiG) currency introduced in April last year, that restored stability in the market.
“CZI notes that this stability came at a huge cost for business. We believe that if maintained, this will lead to a sustained improvement in the performance of the formal businesses and Government revenue,” CZI said.
Offering its perspective on dedollarisation, the country’s most powerful business lobby said the process must be demand-driven, through increasing the proportion of taxes paid in local currency and reducing the ZiG transaction costs.
Zimbabwe is expected to maintain a multicurrency regime until 2030, by which authorities believe appropriate conditions would have been achieved to return to a domestic mono-currency.
“A clear roadmap towards dedollarisation, with well-defined milestones should be developed to ensure economic stability. “To support the use of electronic transfers, the costs of transacting electronically should be reduced significantly,” CZI said.
The central bank, in the MPS, said banks and all other payment system providers must not charge for any transaction equivalent to US$5 or below.
Earlier, the bank had also directed banks not to charge any fees for bank balances of amounts equivalent to US$100 and below.
CZI welcomes the removal of the 5 percent trading margin saying this was a significant step towards a more liberalised foreign exchange market.
However, CZI said concerns remained regarding the reduction of report retention, which was lowered from 75 percent to 70 percent. The central said this was critical to support mobilisation of forex needed to support ZiG stability.
The industrial lobby said businesses should be allowed the freedom to trade the additional 5 percent export surrender on the open market before being made to sell to the central bank or investing in the US dollar-denominated deposit facility.
CZI said the exchange risk associated with the parallel market premium was a moving target that made business planning difficult, leading to discontinuation of export business in certain cases.
While the central bank has directed all businesses to obtain POS machines, the business lobby group said, not all businesses, for instance consultancies, handle cash and may not need to have such.
Commenting on the targeted trade facility, meant to support productive sectors and key segments of the economy like retail, CZI said such facilities had triggered inflation in the past, despite being meant for key sectors of the economy.
“CZI recommends a cautious approach to these facilities to prevent excessive money supply growth.”
The industrial lobby urged the central bank, given its tight liquidity position on ZiG, to consider reducing statutory reserve ratios for US dollar deposits, to allow banks to lend more to businesses in the hard currency.
CZI opined that this was a safer way to maintain stability in the economy than using statutory reserves from ZiG deposits to lend to needy sectors of the economy.
In terms of Treasury Bills issued for outstanding auction funds, CZI said the compensations by the central bank should not be on a 1 to 1 basis as happened with legacy debts, as this eroded confidence.
“CZI proposes repayment in US dollar terms over a structured 12-month period to restore confidence in the instrument or allow businesses to use them to settle their tax obligations,” CZI said.
The industrial lobby said businesses were facing a liquidity crunch while the Zimbabwe Revenue Authority was not accepting payment plans.
“Businesses cannot be the only ones that can accept this local currency paper in the market while the issuer, who is the Government, cannot accept it for statutory payments.”
CZI concluded by saying it welcomes the central bank’s commitment to a tight monetary policy stance, which has contributed to inflation and exchange rate stability.
