Parliament Challenges Government To Tame Exchange Rate Disparity





SPEAKER of the National Assembly Jacob Mudenda has called on government to urgently resolve the disparity between exchange auction rate and the parallel market rate.

Officially opening the 2022 Annual Pre-Budget Seminar in Victoria Falls Saturday, Mudenda warned that if the disparities are not addressed urgently, the National Development Strategy 1 (NDS1) objectives would not be met.

He urged government to stockpile gold and improve its as a counterbalance for the Zimbabwean legal tender.

“One of the key outcomes from the presentations at the Pre-Budget Briefing Seminar was the worrisome disparity between the exchange auction rate premium and the odious parallel market rate which is now hovering around ZW$200 per one unit of the United States dollar as compared to the forex auction rate of ZW$90 per unit of the United States dollar,” Mudenda said.

“If this conundrum is not addressed, it will derail the NDS1 objective of stabilizing the inflation rate and fail to contain it within the SADC macroeconomic convergence of between 3-7%,” he said.

Mudenda also commended the current efforts by the RBZ of holding the parallel markets culprits to account and also its recent engagement with the private sector in order to bring sanity to the exchange rate regime though not enough to deal with the current crisis.

“However, my crude economics instructs that we can restore the store value of our Zimbabwean dollar by marshalling in substantial gold reserves into the Reserve Bank as a counterbalancing measure for our Zimbabwean legal tender. That is how the American dollar has never suffered devaluation over the years,” he said.

This year’s Pre-Budget Seminar objectives are to review the macro-economic performance of the current 2021 national budget as an inescapable point of departure to crafting the 2022 national budget processes, especially as to whether the 2021 Budget performed to expectation in terms of the actual disbursements.

“It is insufficient to draft a robust budget that responds to vision 2030 and to our NDS1.  Parliament must adhere to promptings of Section 299 of our Constitution when read together with Standing Order No. 21 (a) which demands that,  ‘Parliament must monitor and oversee expenditure by the State and all Commissions and institutions and agencies of government at every level… to ensure that (a) all revenue is accounted for; (b) all expenditure has been properly incurred, and (c) any limits and conditions on appropriation have been observed.”

“It is worrisome to note that in his Mid-Term Fiscal Review, the Honourable Minister of Finance displayed a ZWL$570 million budget surplus for the half-year ending June 2021 when most line ministries and government departments had received allocations far below the 50% threshold of the full-year budget appropriations, including Parliament,” the Speaker highlighted. – Newzim