OPPOSITION political parties have demanded that Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya resign, accusing them of crafting anti-poor policies that are worsening the plight of the majority in the country.
Economists yesterday took a dig on government’s 200%
interest rate hike on bank loans, saying the development would worsen the
plight of ordinary citizens and give rise to loan sharks and backyard lending
schemes.
Zimbabweans, especially civil servants, have been relying
on personal loans for their upkeep following erosion of their salaries by
inflation, which is currently at 191,7%, the highest in years while the local
currency has weakened to $720 against the greenback on the black market.
The central bank on Monday announced that bank interest
rates would be raised to 200% from the current 80% in an effort to mop excess
liquidity in the market and curb speculative borrowing.
Finance ministry secretary George Guvamatanga said the high
interest rates were targetted at companies.
“We need a complete rethink of the Zimbabwean business
model. We cannot have corporates in this country that are based on monopoly
pricing, but are accessing cheap power and cheap credit. The new interest rates
are targeting such entities,” he said.
Following the RBZ announcement, President Emmerson
Mnangagwa then used his Presidential Powers to promulgate Statutory Instrument
(SI) 118A of 2022 stipulating that if a bank loans out foreign currency to a
lender, the loan must be paid back in foreign currency.
“Being an authorised dealer or any other banking or
financial institution registered or required to be registered under the Banking
Act or the Microfinance Act [Chapter 24:30], lends foreign currency or advances
credit denominated in any foreign currency to any other natural or legal
person, must, notwithstanding the terms under which the loan or credit is
advanced, receive repayment of the loan or credit in that foreign currency; and
any failure to do so shall render the natural or legal person concerned guilty
of a civil infringement,” the SI read.
However, economists and labour unions told NewsDay that
government was being insincere because the majority of workers in the country
rely on personal loans to pay for their day to day upkeep.
Confederation of Zimbabwe Industries president Kurai
Matsheza said the effects of the 200% interest hike would be passed on to
ordinary consumers.
“Businesses are there to make profits and whatever cost
they will incur, this will be passed onto the consumer. In this case, it is the
consumer that will bear the brunt of these measures. We are still consulting
with our broad membership to establish the effects of this new pronouncement,”
Matsheza said.
Educators Union of Zimbabwe president Tafadzwa Munodawafa
added: “It is very rare to see a clean pay slip for civil servants. Most of
them have three loan deductions and it shows that most of them are surviving on
borrowing. What the government has done is milking the little the workers are
getting.”
Leaders of opposition political parties have also roundly
condemned the measures announced by Ncube and the hiking of interest rates,
saying the policies were anti-poor.
In a statement, opposition Citizens Coalition for Change
said: “The main policy interventions announced by Ncube are a reiteration of
policies that already exist and have failed to curb hyperinflation and
stabilise prices. Unfortunately, the measures announced today have no capacity
to transform the ailing fortunes of the Zimbabwean economy. The purported
entrenchment of the multi-currency system and interbank market in law is not
new.”
People’s Unity Party leader Herbert Chamuka said Ncube and
Mangudya should resign because they had failed.
“They are only good at burdening the ordinary citizens.
People are suffocating because of their policies,” Chamuka said.
In a statement, The Fight Inequality Alliance Zimbabwe
said: “History tells us that there has always been the selective application of
monetary-related law in Zimbabwe, with big and politically-connected businesses
who would have breached these being immune to law enforcement.” Newsday
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