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Prosper Ndlovu Business Editor
Reserve Bank governor, John Mangudya, has called on businesses in the country to reduce commodity and service prices to enhance domestic economic competitiveness and curb pressure for increased salaries from workers.Speaking during a business breakfast meeting organised by Zimbabwe National Chamber of Commerce (ZNCC) in Bulawayo on Thursday, Mangudya insisted the prevailing economy does not allow upward salary adjustments, despite widespread criticism from labour bodies, amid reports Zimbabwe’s pricing and labour costs were the highest in the region.
The RBZ chief said higher price margins and labour costs were the biggest impediments to economic growth that must be urgently reviewed to ignite life into the troubled economy.
He said the recent introduction of bond coins was meant to curb abuse of the United States dollar in favour of the consumer and restore normalcy in pricing by providing change.
“Our pricing model has been the highest in the region as businesses rounded up prices because of change problems. Our minimum salary is also the highest because of high cost of living,” said Mangudya.
“This is the time to start afresh and we’re saying instead of increasing salaries let’s adjust our prices and enhance domestic competitiveness. As things stand, any marginal increase in salaries will choke the economy.
“Reducing prices will enable workers to derive more value for their money, it will curb imports and ensure that no more companies close and no worker loses employment.”
With the availability of bond coins that are indexed to the US$, the RBZ Governor said, businesses should start rounding prices downwards for the benefit of the poor.
He said in the era of bond coins there was no room for forced buying where customers were cornered to accept sweets and vouchers as change.
Mangudya challenged consumers, despite prevailing scepticism over bond coins, to embrace the currency, stand up and demand value for their money by seeking proper change.
He said the estimated $500 indexed Poverty Datum Line (PDL) for a family of five people has made Zimbabwe a high cost country compared to regional neighbours who use PDL for an individual.
Mangudya said several investors had reservations about investing in Zimbabwe because of high labour costs.
He said while the government appreciated background issues around currency changes and fears over use of Zim-dollar, there was no need for the country to live in the past.
“We’ve all made mistakes and we’re saying let’s start afresh for the economy to move forward. Let’s see things in a positive manner and discard polarisation,” Mangudya pleaded.
He allayed fears over the possibility of a Zim-dollar return saying the government would not gamble with people’s lives as it was aware of economic imperatives of such a decision.
The central bank boss expressed optimism Zimbabwe’s economy was on the mend and called on businesses to play their role and support the government.
“Zimbabwe is too rich to be poor. I’m seeing a sleeping giant, which is now awakening, a giant that will dwarf others. We’ve all the resources and only need to harness them properly and improve on transparency. It’s not all gloom, we just need to discard certain mal-practices,” he added.
During the meeting participants also discussed the need to embrace modern technology to cut costs while others sought clarity on the $1,3 billion RBZ Debt Assumption Bill.
Online Reporter