Speculation fuelling panic buying, black market

IT would appear Zimbabweans have not learnt their lessons from the past as seen in the panic buying of basic commodities that started early this week. This has, in some cases, consequently created artificial shortages as people hoard basic goods in their homes. But the truth of the matter is that no matter how much you can store, it will always run out as long as there is a genuine shortage on the market.

Editorial

It would appear that government’s past record of failing to properly communicate some of its decisions — an art that Finance minister Mthuli Ncube needs to consider — often fuel public speculation and drive people to behave irrationally, as in the current case where they are hoarding basic commodities which they would still exhaust. And what happens after that?

Ncube and Reserve Bank of Zimbabwe governor John Mangudya recently announced a series of fiscal and monetary stabilisation measures to address the economic problems that the country is facing, but the technical nature of such presentations has given rise to many interpretations, many of them merely mythical, and these have significantly contributed to the panic that we have seen over the last few days.

Understandably, Ncube indicated right from the beginning that resolving the country’s multi-faceted crisis was going to be painful and Zimbabweans should brace for it. The need to continue on that path, fully communicating every move as and when it is implemented, remains important. For instance, people would want to know for how long these economic stabilisation measures are going to be with us, and is the shortage of certain basic goods part and parcel of the austerity measures?

The absence of such critical lines of communication has seen the shortage of commodities like fuel and the hiking of prices of basic commodities driving people into hoarding of products such as cooking oil which have been fast disappearing from supermarket shelves. In a way, this reveals the selfish streak in many people, who would rather have many, while others — perhaps without enough disposable lump sums — have nothing.

The relevant authorities really need to find a way of inspiring public confidence so that government’s stabilisation policy finds takers and, consequently, see some kind of stabilisation on the market. What the current situation has simply done is to remind people of the socio-economic holocaust of 2007-2008, and there is a tendency to respond in a manner they did back then — particularly when there is suspicion on whatever policies government wants to implement. The burden of history can often be too heavy a load to carry for the ordinary man.

Uncertainty around government’s stabilisation policy is also behind the panic ballooning of the foreign currency black market rates. Prevailing conditions in the economy such as foreign currency shortages speak to a lack of confidence in the government and its vision. So government’s first port of call is to win that confidence through constantly engaging people and disclosing whatever is going on behind the scenes.

President Emmerson Mnangagwa is traditionally known for playing his cards close to the chest, but having touted himself as a “listening President”, there is need to take further so that be becomes a “Speaking President” too to avoid all manner of speculation, which is a major driver of behaviours such as panic buying.

8 Comments

  1. You members of the “Gutter Press” are responsible for the panic because your head lines seek to achieve that end so that you have ED’s government discredited.

  2. chisangonesbert1@gmail.com

    Now I understand what it means if they say an illegitimate gvt can’t solve economic problems. from this article e writer clearly says people don’t trust e government that’s y he is calling for it to better it’s communication methods. the article speaks about e 2007/8 experience which eroded people’s confidence in the zanu gvt. the question is how can an untrusted party wins elections

  3. Dwayne Williams

    Citizens panic buy, because they are affected the most. It’s foolish not to stock up on essentials, in the hope that government will actually fix our problems.

    If you fail to learn from history, you are a fool.

    Government officials seem immune to shortages. Even as we talk of fuel shortages, helicopters constantly fly across the skies. For what gain, nobody knows.

    Even all the measures currently put in place are actually meant to stabilise government revenue, rather than help the average citizen on the street. Now formal industry is being double taxed, under the guise of taxing the informal sector.

    The black market has been left untouched, because some benefit from the prevailing misery. It’s shameful to turn a blind eye on some of these issues.

  4. the press is responsible for this panic buying.social media is influenced by jounorlists.

  5. If indeed, these shortages are driven by panic buying, and not by lack of production induced shortage, then the shortages should ease up in weeks to come as the goods from suppliers should refill the shelves while demand should have reduced (panic buyers still using inventory), hence prices should then revert to “normal equilibrium prices. The truth cannot be hidden and will surely come out, whether politicians are telling the truth about panic buying or that simply, things are spiraling out of control. Our policy makers should know that citizens creativity and the power of economics (especially arbitrage) cannot be beaten by their rhetoric.

  6. Arbitrage rules right now, like it or not. A government of “technocrats” who lack basic communication skills is the last thing Zimbabwe needs. But with no trust from the productive sector, who really will listen to the representatives of a govt which about half the population suspects rigged the polls? Not only that, they are cheats and liars and also comedians. The economic mess will only go away simultaneously with this government IMHO

  7. wellington zvitsva

    the economy will never be riged and thats a fact

  8. Comment…Those that fail to learn from history are doomed to repeat it. According to Adam Smith there is an invisible hand which operates in an economy the market forces of demand and supply. Demand of goods, forex is far exceeding the supply side. Gvt must remove statutory 64 so that people will import basic goods freely. Which industry are they protecting when we have no industries in this country.

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