Online Reporter
The International Monetary Fund (IMF) has once again commended Zimbabwe for maintaining fiscal discipline, which has helped to contain inflation and stabilise the exchange rate.
The IMF said the Government has stopped printing money to finance its projects as was the case in the past hence it has made significant progress towards restoring macroeconomic stability.
The fund’s African Department Director, Mr Abebe Aemro Selassie, told journalists during the presentation of the new regional economic outlook for sub-Saharan Africa at the IMF-World Bank Annual Spring Meetings in Washington DC, United States, that the diminished recourse to the Reserve Bank of Zimbabwe’s financing window has been a key policy shift aiding progress towards restoring macroeconomic stability in an economy long plagued by hyperinflation and exchange rate volatility.
Mr Selassie said Zimbabwe’s policies had contributed to solid economic performance, even in the absence of concessional financing that other countries in the region are benefitting from.
“Zimbabwe has faced considerable challenges in recent years and one of the distinguishing factors has been its limited access to concessional financing, which has helped other countries cushion the impact of global shocks.
Against this difficult backdrop, it is encouraging to see Zimbabwe implementing sound policies,” he said.
Mr Selassie said Government’s recourse to central bank financing has declined significantly. He said it was therefore important to sustain this trend as reliance on central bank funding has in the past contributed to inflation and exchange rate volatility.
“We are encouraged by the Government’s recent actions and implore it to maintain this momentum” said Mr Selassie
Government through the RBZ has come up with several measures to stabilise the local currency, ZiG, hence consumers are enjoying its purchasing power.
The business community should also be commended for embracing the ZiG unlike in the past when most businesses shunned the local currency forcing consumers to buy the US$ on the black market to enable them to buy products. There is discipline in the market place and consumers are free to use currency of their choice to buy at most retail outlets.
Prices of most goods and services have stabilised because the local currency has remained strong. The RBZ Governor Dr John Mushayavanhu has said the use of ZiG in the economy, has improved significantly thereby presenting a positive outlook.
The RBZ said the amount in circulation is enough to meet daily deposits and withdrawals by members of the public. In order for the ZiG to remain stable, businesses should avoid speculative pricing system as what used to happen in the past.
The measures taken by the RBZ have not only stabilised the ZiG but have also resulted in the decline of black market activities hence the convergence between the parallel market rate and the official rate.
Businesses, as we have said in the past, should not thrive on greed and profiteering but should continue to support the ongoing measures meant to stabilise the local currency and also grow the economy.
The use of local currency has impacted positively on the economy as evidenced by the revival of a number of companies and the increase in productivity. The use of local currency also improves the competitiveness of goods produced by local companies.
Bongani Ndlovu