Zimbabwean academic, financial analyst, and economist, Gift Mugano, has warned that goods will disappear from supermarket shelves after the government introduced rules making it mandatory for businesses to use the fixed exchange rate.
On Thursday, 09 May, the Minister of Finance, Economic Development, and Investment Promotion, Mthuli Ncube, gazetted Statutory Instrument 81A of 2024 which penalizes individuals and companies charging prices above the prevailing official foreign exchange rate.
The official exchange rate in the economy is set daily by the Reserve Bank of Zimbabwe (RBZ).
Offending firms and individuals will be fined ZiG200 000, but if the foreign currency taken in is higher in value, then the penalty equals that foreign currency.
Furthermore, the 10 per cent premium that retailers were allowed on the official exchange rates between foreign currency and the ZiG has now been abolished.
Responding to the developments, Mugano said Statutory Instrument 81A of 2024 “will definitely kill the formal businesses”. He wrote on X (formerly Twitter):
The New Amendments to the Exchange Control is a total disaster!
Goods will disappear from the formal sector and appear in the informal sector! Unfortunately, GOZ can’t regulate or enforce compliance in the informal sector because it’s gigantic & stubborn.
This gives the informal sector latitude to set own informal rules and disregard government policies/regulations.
The informal sector has the flexibility to operate at competitive exchange rates/black market rates which will definitely kill the formal businesses.
The irony is that we have been on this road before and it didn’t work! GOZ must develop a culture of carrying out impact assessments of its policies and come up with improved policies.
The informal sector is a menace and fluid – we must apply critical thinking not emotions if we are to redirect the economy on the right path.
In my previous instalments, I proffered solutions which GOZ must consider to save the ZiG but authorities ignored the advice.
It is high time that we undertake a comprehensive assessment of the root causes of our economic problems. We must never be prescriptive.
At the moment I humbly suggest that authorities stop issuing press statements and statutory instruments because it is not taking us anywhere.
Let us undertake a 360-degree investigation of our economic crisis and come up with comprehensive solutions which must include political remedies!
Otherwise, we are going nowhere.
