Mnangagwa panics over crisis

Mnangagwa panics over crisis
Published: 11 October 2018 (214 Views)
President Emmerson Mnangagwa is leaning heavily on his officials to restore sanity in the country's economy with analysts saying their knee-jerk responses betray unprecedented levels of panic.

Mnangagwa's governing Zanu-PF party now believes that there is a third force behind the economic meltdown, bent on sabotaging its efforts at reviving the economy.

Party spokesperson Simon Khaya Moyo issued a stinging statement on Tuesday, blaming external forces for throwing spanners into the works - two months after the July 30 polls.

"It is therefore correct to suggest that there is a hidden hand in all what is transpiring in our economic scenario; economic sabotage is at play," Khaya Moyo said.

"The fluidity of exchange rate fluctuations on the informal market and the rampant price escalations are artificial and cannot be justified as they are not informed by economic fundamentals," he added.

Earlier, party youths had declared war on illegal foreign currency traders and Zanu-PF bigwigs suspected of driving rates on the thriving black market.

Zanu-PF youth league secretary Pupurai Togarepi gave the traders a week to leave the streets or face the consequences.

Despite his ominous warning, the bond note continued to crash precipitously against the United States dollar - causing mayhem in mainstream business and resulting in panicking shoppers rushing to hoard basic goods.

Yesterday, Finance minister Mthuli Ncube - whose austerity measures triggered a storm last week - issued another statement to calm the markets.

The crisis followed his introduction of a transaction tax pegged at two cents per dollar that backfired spectacularly after it was roundly rejected by crisis-weary Zimbabweans.

Ncube appeared to be mellowing yesterday, saying the country shall continue to use the multi-currency system, put in place by government in 2009.

"This system entails that foreign exchange earners are not prejudiced of their regulatory foreign exchange receipts and that those who do not earn foreign exchange have access to foreign exchange through the banking system as is per the current policy of foreign exchange management system," he said.

The Finance minister said it is critical to re-state government's great commitment to reducing fiscal imbalances which are the root cause of the many challenges the economy is facing.

"The challenges include cash shortages and the proliferation of foreign exchange parallel market rates which have a negative effect on prices," Ncube said in a statement.

"These challenges require that government positions the economy on a strong footing by implementing reforms that include cutting on government expenditure, working towards import parity pricing system, increasing efficiency on government delivery systems and fast-tracking the State-owned enterprises reforms, among a host of reforms."

Political analyst Maxwell Saungweme said believing that the price hikes were not a result of economic fundamentals at play, but sabotage of a political nature was "sheer illiteracy and psychosis wound in one".

He blamed the crisis on Zanu-PF's excessive borrowing from the central bank to bankroll its elections campaigns as well as policy inconsistencies in government.

"To try and explain this as economic sabotage is very rudimentary and heedless and points to a panicking government," Saungweme said.

He said focus should be on getting every Zimbabwean together and confront the fallout from the policy changes together than further dividing people by cooking up unfounded economic sabotage claims.

"Smart people look for solutions and obtuse ones look for blame," Saungweme said.

United States-based human rights activist Dewa Mavhinga said what is obtaining in the economy was predictable "given the lie perpetuated for years that the bond note was the same as the US dollar".

"Another factor that contributed to the madness is the cruel and unjustifiably punitive two percent tax to the suffering masses of Zimbabwe," Mavhinga said.

He said overtaxing Zimbabweans will not result in the country being open for business, as Mnangagwa claims.

"Rather, the clueless authorities are closing Zimbabwe for business," said Mavhinga.

- Daily News

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