HARARE – Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya says fuel shortages are caused by structural challenges such as heavy reliance on imports, debt overhang, fuel price hikes and low production.
The RBZ boss also revealed that the country is using US$80 million per month to purchase fuel.
Dr Mangudya made the explanation while appearing before the Parliamentary Portfolio Committee on Mines and Energy today.
A debt overhang is the condition of an organisation (for example, a business, government, or family) that has existing debt so great that it cannot easily borrow more money, even when that new borrowing is actually a good investment that would more than pay for itself.
The portfolio committee chairperson Mr Themba Mliswa quizzed the RBZ Governor on why government is buying high end expensive cars for Ministers when the country has such structural challenges and not promoting local industry such as Willovale Mazda Motor Industries.
The committee also queried why fuel companies demand cash and shun plastic money which could help to preserve the country’s foreign currency.