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Natasha Chamba, Business Reporter
THE Confederation of Zimbabwe Industries (CZI) has said urgent stakeholder dialogue is needed to address raging informal exchange rates and the pricing distortions in the market.
The leading industry body is convinced that Government has addressed most of the economic fundamentals under its Transitional Stabilisation Programme (TSP) and as such the prevailing economic distortions have no justification.
Treasury has successfully cut public expenditure and has been registering budget surplus since last November.
Government has also contained money supply and implemented both investment and monetary policy reforms to enhance ease of doing business.
What is however disturbing is that the cost of living has of late risen beyond the reach of many due to incessant price increases fuelled by parallel market exchange rates.
This has eroded earnings and as such businesses have been witnessing a sharp decline in demand for their goods.
The CZI president, Mr Sifelani Jabangwe said what is happening cannot be blamed on economic fundamentals.
He therefore called on all Zimbabweans to have confidence in measures being put in place by Government to stabilise the economy.
He blamed the price increase madness on speculative behaviour by businesess that are yet to have confidence in the interbank foreign currency market.
Mr Jabangwe said the interbank exchange rate was expected to stabilise at about US$1: RTGS$4 which should see prices of most products dropping.
“Ideally the rate should be setting around US1:RTGS$4, meaning prices would come down significantly.
“The problem we are having is that businesses are pricing their products based on the parallel market rate,” he said.
Mr Jabangwe said his organisation had already engaged businesess on the issue through the Employers Confederation of Zimbabwe (EMCOZ) and was pushing for a meeting under the Tripartite Negotiating Forum (TNF).
He said all these meetings were aimed at explaining the ongoing economic reforms and what the Government and businesses intend to achieve.
— @queentauruszw
Online Reporter