PRESIDENT Emmerson Mnangagwa says his administration has no
immediate solution to dealing with illegal foreign currency trade despite
admitting its role in the economic crisis.
Last week, official figures showed that inflation nearly
doubled to 175,66% in May from 97,85% in the previous month, revealing an
economy already in hyperinflation, a situation last experienced in 2008.
Government suddenly outlawed the use of foreign currencies
on June 24 in favour of the re-introduced Zimbabwe dollar in part to catch out
foreign currency speculators, which it blames for price volatility.
After liberalising the interbank market, the official
exchange rate has shot up to $8,86 to the greenback compared to $10,1 on the
parallel market which has persisted despite a crackdown by law enforcement
agents.
Prices remain high because much of Zimbabwe’s economic
activity takes place in the informal sector, where costs are set based on the
higher parallel market rate.
In the case of large retailers, prices are set based on
internal inflation tracking, which invariably is higher than the official rate.
Addressing a Zanu PF women’s league national assembly at
the party’s headquarters last Friday, Mnangagwa said he did not have an
immediate response on how he intends to deal with them.
“You have mentioned the issue of money changers selling our
money to the people; yes, we see that on TV and we are still asking ourselves
what we can do to deal with that. It is something that we are still looking at,” Mnangagwa told the party supporters.
Before his address, the women’s league boss, Mabel
Chinomona, had pleaded with Mnangagwa to deal with the money changers, who she
accused of fuelling price increases of basic goods and services.
“President, you said no more to money changers, but we have
seen them coming out in their numbers and now they are using cars near the post
office. Our people are going there looking for money, our own local currency is
being sold there. The question is who is giving those people that money. You
find them with new notes and the question we want to know is: Who is funding
these people?” Chinomona asked
But the opposition has charged that Mnangagwa had no
capacity to deal with illegal money changers because his administration was
involved and driving the illegal market.
MDC secretary for economic affairs, Tapiwa Mashakada said
as long as the State was involved in the illegal market, the vice would
continue unabated.
“Under normal circumstances banks and bureaux de change
sell or buy forex on a willing-buyer, willing-seller basis, provided the forex
is available. In the case of Zim, the official forex market (interbank market)
is dry, hence buyers and sellers go to the parallel market, where they can get
forex,” Mashakada said.
“It is alleged that government is the main driver of the
parallel market because questions are raised when new bond notes are traded on
the black market. It is illegal, but in this case, it is the only reliable
source of forex. No country has managed to completely eliminate the parallel
market. It can only be minimised.”
The Zanu PF youth league last month named senior Zanu PF
officials and some top government officials, who they said were involved in
illegal forex deals, including the son of Information minister Monica
Mutsvangwa, Neville.
Mnangagwa promised to set up a commission of inquiry to
probe the allegations. But the commission is yet to be set up. Newsday
0 comments:
Post a Comment