BY TENDAI KAMHUNGIRA
THE prices of basic goods in the country will continue to slide as the government looks beyond the upcoming national elections in its quest to lift the quality of life of all Zimbabweans.
So says Treasury permanent secretary, George Guvamatanga, who also told the Daily News On Sunday at the weekend that authorities had “enough weapons in the armoury” to ensure Zimbabwe’s long-term economic stability.
In addition, Guvamatanga also revealed that Treasury was in the process of reviewing income tax bands, to ensure that more money landed in the hands of the country’s workers.
“For consumers, we are very happy with what we are seeing in terms of prices coming down. We also believe that they should come down further. “In that regard, we will continue to deal very strongly with errant retailers and manufacturers.
The message to consumers is that they should not be ripped off when they buy goods. “Similarly, the message to retailers and manufacturers is that we are serious as government and we are not going to allow them … to rob or abuse consumers.
“If they do that, we are going to withdraw their licences … which means that those companies won’t be in a position to continue operating,” Guvamatanga told the Daily News On Sunday. “The economy is very stable and we anticipate that prices will continue to come down. Inflation will also come down as we have created a sustained platform for further economic growth.
“The stability we are seeing at the moment will be easily sustained in the medium to long term,” he also said. This comes after the government recently introduced a cocktail of policy interventions to shore up the economy, which resulted in both the Zimbabwe dollar and the prices of basic goods stabilising. “When the bouts of instability occurred, there was even talk that the exchange rate would go to $50 000 per US$1 by August this year, and many people believed that the instability was sustainable. But that was not true.
“We would not have brought in the new measures, two months before the elections, if we didn’t know that the measures would work. “Those measures were based on correct market fundamentals and on the correct assessment of the market, to ensure that we have market stability,” Guvamatanga told the Daily News On Sunday.
“This market stability is sustainable even after the elections and going forward into 2024. In fact, it’s only the media and politicians who are looking at the elections. “Some of us have already moved past that. We are already planning prudently for the post-election period.
“We are planning for 2024, 2025, 2026 — and the basis is that we are going to have a strong, robust and very stable economy,” Guvamatanga further told the Daily News On Sunday.
He said authorities were working at giving relief to ordinary people by revising tax bands, to boost their spending power. “We are currently in the process of reviewing our tax bands. We have realised that everyone is now being asked to pay tax, including those who do not meet certain thresholds.
“So, we are working towards rectifying that. However, once we rectify this issue, it has to be followed by a law which allows the review process. “This is what may delay the process. But I will ensure that this is done as quickly as possible to enable workers to remain with sufficient disposable income. This will also ensure money circulates in the economy,” Guvamatanga added.
All this also comes after Finance minister Mthuli Ncube said last month that the government would ensure that the current economic stability would be fortified.
Speaking to the Daily News On Sunday’s sister paper, the Daily News then, Ncube said his upcoming mid-term budget review — which he would unveil before Zimbabwe holds its crunch national elections this month — would be geared towards achieving this.
“We have all the tools we need to overcome our challenges. Indeed, we are continuing to introduce new, and to fine-tune current economic measures so that both the exchange rate and the prices of basic commodities remain under control.
“I encourage all citizens to take advantage of the current strong growth that is staying on course. They should go about and do their business as they used to do before.
“Those who are saying that once we start paying our contractors the exchange rate will shoot up are wrong. We are actually paying the contractors as we speak,” Ncube said then. “Tightening fiscal and monetary policies does not mean that we are not paying contractors. They are being paid using the correct exchange rate.
“All that we have dealt with is the value-for-money aspect, to make sure that services are properly priced, and not priced at crazy exchange rates.
“They should be priced at the correct exchange rate which is the equilibrium. In recent weeks we saw that the exchange rate was way above the equilibrium “We will make sure that the exchange rate reflects the fundamentals of the equilibrium,” Ncube further told the Daily News.
He also disclosed that the mid-term budget statement would be announced before the August 23 polls. “A mid-term review of the economy is under way. We are finalising the process now and we will soon be able to communicate to the country in terms of where the economy is. “The mid-term budget review will come before the elections. We will produce information on where we are on the economy and budget utilisation.
“But I can tell you now that everything is in good order. We never live beyond our means. I don’t like budget deficits. “Everything is under control. There is no risk of over expenditure at all because of elections,” Ncube added.
The Treasury chief also said despite the government providing resources for the upcoming elections, the economy had been moving on a positive trajectory. “Elections are not slowing down the economy. I can assure you that on the fiscal and monetary front everything is under control. This is why you see the stability in the exchange rate and prices.
“We have been mopping up all excess liquidity. We have to make sure that interest rates remain at a level where they are able to reflect the true value of capital in an inflationary regime.
“It’s quite clear that our exchange rate’s serious overshooting of the past few weeks had to be controlled. Now you have seen that the exchange rate is coming down.
“I notice that in the past couple of weeks the Zimbabwe dollar has been the best performing currency in the world — appreciating by more than 45 percent. “This just shows you that we, the authorities, have the capacity to put things under control,” the upbeat Ncube further told the Daily News.