ED must consider Ncube’s proposals

WHEN President Emmerson Mnangagwa addressed the nation yesterday, there was hope that he would give a clear strategy towards addressing the currency distortions that have left the country on an economic precipice.

Editorial

The nation had expected that after new Finance minister Mthuli Ncube promised to address the currency distortions in the market, including the prospect of dumping the country’s surrogate bond note currency, Mnangagwa would have gone a step further to give the much-needed confidence in the money market.

The current situation is untenable, Ncube reasoned, given the wild fluctuations on the black market were largely due to the rule of the market.

The bond note, he said, was behind the spiralling of the US$ black market rate and the market immediately responded, but in a very unpredictable way.

The US dollar rate to the bond note and the real time gross settlement rose to about 100%, triggering a wave of price changes.

Yesterday’s State of the Nation Address at the official opening of the First Session of the Ninth Parliament was a perfect opportunity for Mnangagwa to ring currency changes that could address the situation.

But alas, Mnangagwa opted to ignore the current currency distortions and maintained that the country would continue with the current system, including the loathed bond note.

Mnangagwa’s promise to inject $500 million into the market will not help anything if the currency distortions are not addressed.

Market speculation will remain in place, and so is the hunt for the greenback on the informal market that will continue to fuel inflation.

With the issue of currency distortions not addressed, the said $500 million may struggle to bring sanity in the foreign currency market and the money will be quite inadequate to meet the growing appetite for foreign currency by business and the public in general, particularly government itself.

His decision to defer reintroduction of the Zimbabwean dollar until the current negative economic fundamentals have been addressed is most welcome, but what the President forgot is that the bond note is the local currency in another name.

It would be better for Mnangagwa to consider his Finance minister’s proposals seriously. The country does not need the bond note in its currency basket.

The reason why Mnangagwa probably needs the bond notes is because he has the powers to print them to satisfy the skyrocketing government expenditure as well as his Zanu PF party’s populist policies.

Populism will not work if he is serious about addressing the prevailing currency distortions. His government should cut down on its expenditure and avoid printing bond notes to buy US$ and finance its operations.

18 Comments

  1. the big question which is not being answered is Why the business continue to hunt for the greenbuck on the Black Dirty Market in order to restock, this tells one that there is bluntant profiteering taking place as one would have expected the supermarkets to be empty but alas the shelves are full meaning to say all the stories being told are not correct and the instigators who are known must be arrested

  2. If we remove the bond note then that means we will start using the USD.Ever thought that we are currently importing about $150 mln for business and gvt consumption what if we remove the bond note how much more we will need to import for general population’s consumption? what about the coins for change,where will we get them from?We need to be objective before we criticize.

    1. taura hako fidza. if the usd was to return most of us would either stash it somewhere or spend it outside ultimately killing local business by flood the market with cheaper alternatives. people should stop acting as if the advent of the usd brought macroeconomic stability. save for inflation control, it did not solve employment issues, balance of payments issues (we still continued to import more than what we exported) and economic growth was noteworthy but insignificant

  3. Mnangangwa uri mboko yemunhu.usada chigaro usina plan

  4. There’s no need to waste time doing an analysis of anything here, there’s simply no hope of any economic recovery with clueless ED and his team

  5. Nhai va Anonymous where should business hunt for the greenback? Let’s avoid commenting on issues that we have no competence in. WHATS IS MONEY, va Fidza?

  6. Newsday , please consult if you do not know what is happening . News is not what you think . You should research . The finance minister has already said he is working on a recovery plan to be unveiled soon in conjunction with the reserve bank monetary policy . You sound like you did not get that . The president will present the monetary business via the arms which are the finance minister and the RBZ governor . Please consult before you shout loud in ignorance .

  7. Newsday , please consult if you do not know what is happening . News is not what you think . You should research . The finance minister has already said he is working on a recovery plan to be unveiled soon in conjunction with the reserve bank monetary policy . You sound like you did not get that . The president will present the monetary business via the arms which are the finance minister and the RBZ governor . Please consult before you shout aloud in ignorance .

  8. ED was campaigning singing a son that we have more than 20 billion FDI commitments. Let the money come as he was promising and bring the recovery to the economy as he claimed!

  9. This is an “editorial” and its surprising that the editor of the newspaper is not aware that elsewhere in his newspaper today he is carrying an article where the finance minister is talking of the looming fiscal and monetary policy statements next month, which are the correct instruments to address currency reforms. Why then would a whole newspaper shout out loud that the president is not considering his finance minister’s proposals seriously? Worse still, you expect the president to have introduced currency reforms iye achivhura parliament yet its the duty of the ministry of finance and the RBZ, who have already indicated that they are working on something. Some people are just too good pakushora even in areas that they are not competent in, regai vanhu vamboita basa ravo tiwane kufamba!

    1. Van Kays MaZanu, ma instrumnets kudii kwacho, hapana chinobuda apa.

  10. There is an article in this paper saying the minister is to announce policy next month and you say the president must have announced yesterday!!
    Did you want him to per-empty the minister?

    1. Exactly my point! Munashe you are spot on bro.

  11. As long as Zimbabwe uses USD it will be a haven for dollar hunters…Gaddafi’s theology on a united state of Africa got him ousted yet in reality he was a very wise man…I concur with finance minister…adopt the rand as an interim currency to stabilise our economic progression… The rand will promote stability even among local manufacturers and as a nation we can all improve…it will also cut out all the middle men and pretenders …most small to medium businesses are run by unscrupulous greedy middlemen who do not pay Zimra or pension for their workers …they employ only contract temporal workers and abuse our little sisters whilst hunting USD the Rand people of Zimbabwe is a million times better than a bond note…at present our economy is in the red due to the greed for USD,progress takes time the rand will see us progressively develop …and P.S its not a MDC or Biti or Chamisa idea it is a reality of what Zimbabwe needs now …
    John Rambo

  12. So Munashe thinks they ll be anything new to smile about on the so called monetory policy when there is confusion at the top there, initially the minister indicated that bond notes will be a thing of the past come year end, but as ussual with Zanu it was the decision of the president that bond notes are going nowhere which stood thats why we were to hear minister Ncube coming back again to parrot that the bond notes are going nowhere coz baba has said so.

  13. Comment…Gono had the so called policy statements but Bob and Cabal had different designs.Ncube (Gono) and ED(Bob) are already at it …many policy U_turns are coming.Ncube will gobble a lot of humble pie as it is.

  14. One of the reasons why fewer urban people voted for Zanu PF is because Zanu PF people talk more (chatty chatty) and deliver very little or nothing. They also design systems & procedures with loopholes so that they use those to hack the same systems. …. they also ensure that no review or control mechanisms are in place so that they loot as they please whenever. The western countries realised this ages ago.
    This ZPF mindset was wholesomely rejected in the last poll by the few people (left) who work for a living…only very lazy and naive people expect miracles from Zanu PF.

  15. Comment…guys if yu thnk znupf wll solve this crises uuuuum yua stll sleeping

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