Editorial Comment

Budgetary support important to fight economic sabotage

EFFORTS by the Reserve Bank of Zimbabwe (RBZ) to stop rent-seeking behaviour sabotaging economic recovery need the backing of every well-meaning Zimbabwean. Over the past two decades, the majority of Zimbabweans have been wallowing in abject poverty due to a tanking economy and the political cacophony in the country.

With the RBZ and the treasury coming up with a raft of measures last year to stabilise the economy and place the country on an economic recovery path, we have noted with deep concern the resurgence of the foreign currency black market.

Three weeks ago, the rate of the greenback on the grey market went haywire — going up as high as US$220 to the US$. On the official market, the rate is about $90. This forced authorities to crack the whip and go after foreign currency manipulators. Some of them are in remand prison, while others were named and shamed. Their bank accounts were frozen and those who used mobile money transfers to make huge unexplained transactions had their lines closed.

As a result, the exchange rate on the black market has been tumbling and is expected to do so further. We need sanity and prudence in the market if the country’s economy is to improve.

Authorities have to remain on their toes to clamp down on rent-seeking behaviour.

There is a need to go after the big fish — who are bent on reversing economic gains the country had been making since mid-last year.

Despite some challenges, foreign currency availability had improved in the country since the Dutch Auction System was introduced last year. Authorities are on record saying there is plenty of hard currency in the official payment system of the country, adding that the country is sitting on more than 10 months import cover — a position never experienced in the past two decades. This shows a functioning economy though the spin-offs are yet to benefit the ordinary Zimbabwean.

It is against such a sagacious background that we fully support central bank czar John Mangudya’s call for law enforcement agencies to be fully capacitated to fight economic saboteurs.

Indeed, such support should come from the 2022 National Budget, which should be tabled before Parliament next month.

“Required complementary support from the 2022 national budget; capacitation of law enforcement agencies to effectively deal with indiscipline in the economy; and encouraging public entities to price in local currency to strengthen demand for the local currency,” Mangudya said at the on-going parliamentary budget formulation consultations taking place in the resort Victoria Falls. Those with ears – hear, hear!