'Mnangagwa presses self-destruct button'

 'Mnangagwa presses self-destruct button'
Published: 25 June 2019 (136 Views)
ANALYSTS warned yesterday that in its desperate bid to halt run-away prices, government might have pressed the self-destruct button by rushing to introduce the Zimbabwe dollar (ZW$) when all pointers on the ground suggest otherwise.

Economic experts had long advised President Emmerson Mnangagwa's administration to delay the exhumation of the ZW$, abandoned in 2009, until they have achieved the right fundamentals, key of which being the return of confidence and sufficient foreign currency reserves to support the currency.

Zimbabwe National Chamber of Commerce chief executive officer Christopher Mugaga said government has hit the deep blue sea, saying its bureaucrats were being reactive instead of being proactive.

"Zimbabwe, unfortunately, has three major economies: the government, private sector - which has power to determine prices - and the informal market. The informal and private sectors determines the trajectory regardless of what government does. The informal sector holds 70 percent of the business and, together with the private sector, they will not take this.

"The effects are that it will seriously quicken inflation and it will also quicken withdrawals from Nostro accounts and it's purely psychological because people will not know what is coming. Deposits in Nostros are going to go down. The stance they took will only push the RTGS (dollar) out," said Mugaga.

Legal watchdog Veritas said the Statutory Instrument (SI) 142 of 2019 which delegitimised the multi-currency regime is not as far-reaching as its makers perhaps intended.

Veritas said "legal tender" means a currency which, if offered in payment of a debt, discharges the debt unless the creditor and the debtor have specifically agreed otherwise.

"So if a debtor owes a creditor $20, say, the debtor can normally repay the debt by offering $20 in RTGS dollars (because they are legal tender). If however the parties have agreed that the debt should be repaid in US dollars, then the debtor must repay it in those dollars.

"There is no law in Zimbabwe which invalidates a contract that stipulates payment in a foreign currency. Similarly there is no law in Zimbabwe that requires prices to be marked up in legal tender or accounts to be drawn up in legal tender," said the legal watchdog.

Veritas said the new instrument does not specifically forbid contracts that require payments to be made or calculated in a foreign currency, so if shopkeepers mark their prices in US dollars, say, or insist on payment in that currency there is nothing to stop them doing so.

"The instrument has all the hallmarks of a hastily concocted measure to stop the downward spiral of the RTGS dollar against other currencies. Whether it will have any such effect remains to be seen," said Veritas.

MDC spokesperson Daniel Molokele said government is merely dealing with the symptoms instead of tackling the bull by its horns.

"As a party, we are concerned by these short gun measures which are done without consultations…we are planning to sit down together and map a way forward not these short gun measures which will not solve the major problems in this country," he said.

- dailynews

Tags: Mnangagwa,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Restrain your wife - Mnangagwa told

by Methusi Ncube | 16 July 2019 | 211 Views

Mnangagwa-Army fallout deepens

by Mandla Ndlovu | 16 July 2019 | 154 Views

Auxilia Mnangagwa: A highly trained CIO spy

by Mandla Ndlovu | 16 July 2019 | 153 Views

MDC apologises to Mthwakazi

by Mbonisi Gumbo | 16 July 2019 | 99 Views

Smelly Dube scoops top UK award

by Staff reporter | 16 July 2019 | 114 Views

Attack on Mugabe coup announcer exposes polarisation

by Editorial Comment | 16 July 2019 | 158 Views

Kombi operators raise fares

by Staff reporter | 16 July 2019 | 169 Views

'Devolution a disappointment'

by Staff reporter | 16 July 2019 | 88 Views

Mnangagwa fumes over ivory, rhino horns

by Staff reporter | 16 July 2019 | 119 Views

MDC blames intimidation for by-elections loss

by Staff reporter | 16 July 2019 | 80 Views

Chamisa changes tact

by Staff reporter | 16 July 2019 | 139 Views

Zimbabwe's telecoms firms in revenue decline

by Staff reporter | 16 July 2019 | 74 Views

Paynet readmits 3 banks as alternative is tested

by Staff reporter | 16 July 2019 | 131 Views

Gukurahundi 'architect' threatens

by STaff reporter | 16 July 2019 | 88 Views

Chamisa's MDC has no more political depth than a finger bowl

by Tichaona Zindoga | 16 July 2019 | 109 Views

Zanu-PF youths take clean-up to UK

by Staff reporter | 16 July 2019 | 91 Views

Prophet in court for poisoning father to inherit his Mazda 323

by Staff reporter | 16 July 2019 | 85 Views

Chmaisa mustn't underestimate the electorate

by Staff reporter | 16 July 2019 | 90 Views

Mnangagwa hands over medical equipment

by Staff reporter | 16 July 2019 | 71 Views

Guard shoots self 3 times in suicide

by Staff reporter | 16 July 2019 | 94 Views

'Convicted thief' Kambarami fights for position at High Court

by Staff reporter | 16 July 2019 | 83 Views

Econet reviews data tariffs

by Staff reporter | 16 July 2019 | 85 Views

Zimbabwe Electoral Commission (Zec) engages political parties

by Staff reporter | 16 July 2019 | 76 Views

NUST hosts summit on fake news

by Staff reporter | 16 July 2019 | 46 Views

Suspected armed robbers, gold dealers in court

by Staff reporter | 16 July 2019 | 57 Views

Zvinavashe estate in shambles

by Staff reporter | 16 July 2019 | 60 Views

SB Moyo flies out to Lusaka on Friday

by Staff reporter | 16 July 2019 | 65 Views

Kambarami: A pig in royal robes still finds amusement in mud

by Ndabazabantu Sondokhulu | 16 July 2019 | 83 Views

Mnangagwa wants Mthuli Ncube to loosen his purse

by Staff reporter | 16 July 2019 | 66 Views

Mnangagwa's govt snubs civil servants again

by Staff reporter | 16 July 2019 | 66 Views

Chamisa worried about Chiwenga

by Staff reporter | 16 July 2019 | 103 Views

'Kill Mnangagwa and spare me, I've kids,' says his wife

by ZimLive | 16 July 2019 | 73 Views

Peter Moyo vs. Old Mutual: 7 key factors as they head to court

by Staff reporter | 16 July 2019 | 54 Views

Mnangagwa wife being watched by military

by newzimbabwe | 16 July 2019 | 74 Views

12 Cyprus scholarships for Zimbabwe students

by Staff reporter | 16 July 2019 | 47 Views

Zimbabwe scraps 15% tax on raw platinum exports

by Staff reporter | 16 July 2019 | 33 Views