Business to ask government to remove subsidies


Business is to ask the government to remove subsidies and lift price controls that are distorting the market because they are not benefiting the intended people but a privileged few, a leading businessman has said.

Zimbabwe National Chamber of Commerce President, Luxon Zembe, said these would be some of the key recommendations at the chamber’s congress to be held from June 28-30 at Victoria Falls.

Zembe, who will be stepping down as the chamber president at the congress, said business would be pushing for the government to remove subsidies on commodities like fuel and maize to millers because they were distorting the market. Besides, they were not getting to the intended beneficiaries but to a privileged few that in turn re-sold the subsidised products to the market.

“We are not saying that the government should remove all controls but it does not make sense for the Grain Marketing Board to buy maize from farmers at $31.3 million a tonne and then sell it to millers for $600 000 a tonne. All it does is to create room for corruption because officials of the GMB can sell the maize to their colleagues who will in turn sell it back to the GMB at a hefty profit,” Zembe said.

The same applied to fuel which is still selling for under $23 000 a litre while it is going for anything up to $380 000 on the open market.

Zembe, who is a strong proponent of the National Economic Development Priority Programme(NEDPP) said the programme still had a chance if the government continued to work together with business as it was doing now.

The NEDPP was launched in April to turn around the country’s fortunes in six to nine months. One of the targets was to raise US$2.5 billion in cash or investments in the first 90 days.

Economic Development Minister Rugare Gumbo was this week quoted as saying the programme had already raised US$350 million in cash. Vice-President Joyce Mujuru, who is in China is reported to have signed power deals worth about US$1.3 billion.

Zembe said business was now involved in corporate agriculture in an effort to revamp the economy as agriculture was the backbone of the economy. This was, however, only a short-term intervention because people needed title to land for them to seriously go into agriculture. The government should therefore speed up the granting of leases to potential farmers.

“One of the biggest mistakes the government made was to remove tittle from land. This left farmers without any collateral. Now it must give them leases so that they can raise capital but it must not give these leases just to anybody but to people that are capable of running farms as a business.

“The government should stop this habit of dishing out money. We have business people who can run businesses without any handouts. These are the people that must be given land,” he said.

On whether he still believed the economic recovery programme would succeed as there seemed to be nothing on the ground to indicate this, with inflation now at 1 194 percent, Zembe said there should be no illusion that come December, all the country’s problems would be over. It would take at least three years to get the country back on its rails.

“What we are trying to do now is to steer the ship in the right direction. It might still be in stormy waters but once it’s facing the right direction we know that we will get there,” he said.

A political observer familiar with the goings-on in the ruling party believed, however, that the country was going nowhere.

“We are not getting anywhere. Everyone (political leaders) knows that the Berlin Wall is falling. So they are busy looting,” the observer said.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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