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Emcoz urges govt to focus on addressing causes of cash shortages

Business
THE Employers’ Confederation of Zimbabwe (Emcoz) has urged government to focus on addressing causes of cash shortages instead of concentrating on tackling symptoms of the problems currently manifesting in the economy.

THE Employers’ Confederation of Zimbabwe (Emcoz) has urged government to focus on addressing causes of cash shortages instead of concentrating on tackling symptoms of the problems currently manifesting in the economy.

BY VICTORIA MTOMBA

Money-saved

Emcoz president, Josphat Kahwema said, while the multi-currency system has been good at curbing hyperinflation, the strengthening of the US dollar was now posing a threat to the country’s economic growth.

He said the country was now flooded by cheap imports and cash was not making its way into the formal financial system.

“Emcoz is concerned, however, that monetary authorities seemed to be not sufficiently sensitive to the depth of public opinion regarding the pending introduction of bond notes. The consultations, before the announcement, if any, were less than inclusive and the confusion and fear that was created could have been anticipated and, to a large degree, reduced if not avoided,” Kahwema said in a statement.

He said although clarification has been made that the bond note will be at par with the US dollar, the ordinary man was concerned that the foreign currency in their accounts would be replaced with bond notes when they go to the bank to access their money.

“In other words, ownership of the real US dollar on banking will immediately transfer to the monetary authorities, who will decide whether or not you can have that real US dollar, when you need it. Under those circumstances, it seems inevitable that the arbitrage market for the used will surface in many unpredictable forms, including reluctance in using the banking system,” Kahwema said.

Central bank governor, John Mangudya announced this month that government will introduce bond notes within two months as an incentive to exporters. The bond facility will be backed by a $200 million facility supported by the African Export Import Bank. The facility was also expected to help the country in addressing cash challenges that have dogged the country since February this year.

Mangudya said the central bank, Afreximbank and a German company that would print the bond notes had an agreement that Zimbabwe would not print money without the other parties knowing.

Mangudya said the facility was a temporary measure and the US$200 million will not be printed all at once, but as per requirement by the exporters.