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ED cornered over deteriorating economy

PRESIDENT Emmerson Mnangagwa yesterday met captains of industry to tackle challenges in the economy, but the meeting failed to come up with solutions, according to people with knowledge of the meeting.

PRESIDENT Emmerson Mnangagwa yesterday met captains of industry to tackle challenges in the economy, but the meeting failed to come up with solutions, according to people with knowledge of the meeting.


Mnangagwa met leaders from the Bankers’ Association of Zimbabwe, Zimbabwe National Chamber of Commerce, Confederation of Zimbabwe Industries, Grain Millers’ Association of Zimbabwe, Consumer Council of Zimbabwe, Confederation of Zimbabwe Retailers and Chamber of Mines, among others.

Sources at the meeting said business indicated to the President that price distortions in the market were a creation of currency misalignment.

A business leader who attended the meeting said they stressed that the solution lay in liberalising the exchange rate.

“It will be painful in the short run, but convergence will be realised in the medium to long term, assuming austerity from the government holds,” he said.

Business also expressed concern that claiming parity existed between the United States Dollar and the RTGS was a source of distortions that creates inflationary pressures as well as promoting black market trading.

“How exactly do we expect to tame government spending by just outlining ambitious strategies which are devoid of figures? How many parastatals are to be weaned off by year-end, how many foreign missions do we want to close as cost-cutting measure, and how are we going to deal with pressure for bonuses this year given the fact that civil service salaries had been significantly eroded by black market dominance?” submissions made to the Mnangagwa read in part.

In a statement summarising the outcome of the interface, the Information, Publicity and Broadcasting Services ministry noted that the meeting agreed that both private sector and government should find each other and speak with one voice.

“There was a lot of listening happening today as speaker after speaker gave their views on the state of our economy, that the threading link between speakers was that despite current challenges, Zimbabwe’s economy was expanding and, therefore, there was a higher demand for foreign currency. That messages from government must be in sync and consistent; that government needs to control its fiscal expenditure as a matter of priority in order to reduce fiscal imbalances,” the ministry said.

Mnangagwa told the meeting that the nation could not run away from its challenges and there was need to rebuild the economy.

The Information ministry said government had put in place measures to alleviate shortages of basic goods.

“As we start our preparations for the festive season, we can assure the nation that government is seized with and implementing solid plans to ensure that the increased demand of forex will be met.”

During the meeting, business applauded government for lifting Statutory Instrument (SI) 122 given the shortages of basic goods and industry’s capacity challenges. Confederation of Zimbabwe Industries president Sifelani Jabangwe, however, said he raised pertinent issues affecting the manufacturing industry and insisted the SI be suspended only until year-end.

“We are quite clear about what we want. We need policy consistency, communication and we highlighted that the suspension of SI 122 be temporary as it may affect the gains that we had achieved as an industry,” he said.

“The meeting was fruitful, but there are no immediate solutions, but from the engagement perspective, it is was productive.”

Chamber of Mines chief executive Isaac Kwesu said although he attended the meeting, it was not a platform for business to air its grievances, but to interact.

“At the meeting the issue of forex was not a chamber issue, but it was an entire business issue. This was just an interactive [meeting]. People who wanted to raise issues were asking questions. As a chamber, we were not waiting for this meeting to air our issues but we have done that in Parliament where we presented a paper last week,” he said.