Economic meltdown: Mnangagwa capitulates, agrees to avail foreign currency

President Emmerson Mnangagwa

AFTER days of threats against businesses following a spate of price increases of basic commodities, President Emmerson Mnangagwa’s government has made an embarrassing climb-down and agreed to provide foreign currency to business.

An angry Mnangagwa in his independence speech lashed out at businesses that had increased prices of commodities leaving ordinary citizens reeling. The Zanu PF leader described the increases as unethical, unpatriotic and inhumane warning he could be forced to resort to price controls.

“Government is alarmed by the recent wanton and indiscriminate increases of prices which have brought about untold suffering to the people.

“This conduct by stakeholders in business, industry and commerce is inhumane, unethical, unpatriotic and goes against the grain of economic dialogue which the Second Republic has espoused. Government remains determined to restore the purchasing power of all workers,” Mnangagwa said.

In response the Confederation of Zimbabwe Industries called for cool heads in dealing with the crisis which now seems to have prevailed over the political posturing from Mnangagwa and his camp.

But after a Cabinet meeting Tuesday, Information Minister Monica Mutsvangwa seemed deflated and showed the tone from government had changed.

“Government is very concerned about price increases and is therefore putting in place mechanisms to ensure foreign currency is made available, to the business community to procure all materials for production processes,” said Mutsvangwa at a post-Cabinet media briefing.

“This will go a long way to stabilise the availability of foreign currency, which is essential to the stability of prices.

“Given this initiative, government is appealing to businesses to exercise restraint and not increase prices wantonly.”

Mnangagwa’s statements last week were followed by a even greater threats and angry talk from Vice President Constantino Chiwenga who told captains of industry on the sidelines of the Zimbabwe International Trade Fair in Bulawayo that government was aware of “financial and economic terrorists in the country.”

“I want to give a stern warning to those practicing financial terrorism in the country. We will react accordingly as Government and nobody should claim that they were not warned. We’ll take very strict measures,” said Chiwenga literally frothing at the mouth.

 “As responsible and patriotic citizens, we should ask ourselves whether our actions are in the best long term interests of the nation?”

Chiwenga accused some businesses of fueling the parallel market.

“The market-based framework for the determination of the exchange rate is expected to facilitate financial sector stability, contain inflationary pressures and build public confidence.

“What we’re doing will work and what the financial terrorists are doing won’t work,” said the Vice President.

“The rising inflation, which we’re now experiencing hurts the whole economy and its development prospects.

“The trend is as a result negatively affecting all of us. It’s now time we engage and openly discuss why as a nation we continue to experience foreign currency shortages yet our foreign currency earnings exceed those of other countries that are not experiencing the same phenomenon.”

As if to expose the panic in the corridors of power, the ruling Zanu PF party was not left out, with secretary for administration Obert Mpofu calling on government to stop the rot.

“We are totally opposed to this wave of price increases and for whatever reason, the party is against it. It is affecting the generality of our people and we have actually pointed out this to government and they seem to be also opposed to these unwarranted increases,” said Mpofu.

“If what we are saying is not listened to, then we will let you know of what measures we are going to take to ensure that people in the market place are responsive to people’s needs.

“We are going to go by what people want and I am sure government is doing its best to contain this wave of price increases.”

Prices of fuel, bread, maize meal and other basics have shot through the roof in the past few month leaving ordinary citizens on the edge amid warnings of social upheaval. Mnangagwa alive to the threat has come out swinging warning of a possible crackdown if need be. – NewsZim