Zimbabwe economy on right path: Analysts

Eddie Cross

ECONOMIC analysts are convinced the economy is in the right direction to full recovery despite the immediate setbacks induced by the deadly Covid-19 pandemic.

Business leaders are agreed that the removal of subsidies on commodities such as fuel as well as the introduction of the forex auction system, a departure from the fixed exchange rate, are positive steps towards stabilising the market and curbing shortages.

Already the forex auction system has resulted in relative exchange rates stability against the United States dollar, which has become a huge blow on the speculative illegal foreign currency dealers. Prices of basic commodities are also expected to drop and bakeries and retailers have already reduced the price of bread.

Government through the Reserve Bank of Zimbabwe (RBZ) has put on freeze all agent and bulk payer mobile money transfers, which were being abused by parallel market dealers.

Central Bank advisor and prominent economist, Mr Eddie Cross, says recent fiscal and monetary policy reviews by Government are gradually stabilising the economy despite external shocks.

With the right economic fundamentals already in place, Mr Cross said he expects the latest policy reviews to strengthen confidence in the local currency and boost domestic production.

“I am quite pleased with the way the fundamentals are working. The economy has since stabilised and exports are on the rise. Local companies that rely on exports have also become so competitive and that is what exactly what we wanted to achieve,” said Mr Cross who is the RBZ Monetary Policy Committee member.

He said mobile money service providers were not banks hence they had to be removed from handling money as they were being abused by some players to sabotage the economy..

“We closed down bulk monetary operations and the use of agent lines. Ecocash is not in the banking system so they cannot continue handling money the way banks do. It can be subject to abuse,” he said.

“We have more USD in our economy than the RTGS. We allowed the use of USD so that it can start circulating. Once Government starts paying civil servants in USD, we should see improvement in the circulation of forex. An increasing number of companies and individuals are depositing forex in banks which is a confirmation of confidence in the banking system,” he said.

Mr Cross, however, castigated some sections of the economy that are refusing the local dollar when transacting saying it remains legal tender. Prominent economist, Professor Gift Mugano, said while working on economic stabilisation, the country should guard against ‘foreign investors’ who might come to loot the USD.

“Yes, the economy is in the right direction. All the fundamentals are working for the good of the economy but we should guard against foreign companies that might come to loot the US dollars we have in our coffers,” warned Prof Mugano.

Finance and Economic Development Professor Mthuli Ncube is also on record saying economic policies put in place by Government are sound but the economy is being sabotaged.

Mininister Ncube said it is unsustainable to allow the black market to lead foreign currency trading hence Government introduced the forex auction system. – Chronicle