How Zimbabwe can revive industry and end its cash crisis

Gabbuza said he was fully behind the call by Chegutu West legislator Dextor Nduna to force Asian businesses to bank.

“If you move around town right now looking for the only business places that are ticking – If you go to Mahommed Mussa, I suspect they could be cashing in US$100 000 or more as turnover per day.  However, the question is, is that money circulating in our banks?”   he asked.

“If we bank US$100 000 cash from Mahommed Mussa alone, will there be a cash shortage in the banks.  Go to the Gulf Complex along Chinhoyi Street and the shops along all those streets around the Gulf Complex, all the shops are Chinese shops and there is a hive of business.  Definitely, all the money being circulated there is not being channelled to the banks.  If they were being channelled to the banks, would we still be having queues of people waiting for money outside banks?

“I think those are some of the things that the Minister must try to consider and see if we can possibly mop up all the money from people who are not keeping money in the banks so that it is allowed to circulate.  Then of course the issue of targeting industries, incentivizing four working industries does not work.  Let us resuscitate those industries that have collapsed.  We do not need to put Government money, let us charge people at the border.  People are importing, put an import tax; that import tax then goes to the industries, the local industries.  I am sure that will definitely work if we try all those proposals.”

Full contribution:

HON. GABBUZA: Thank you Mr. Speaker Sir.  I just have a few points that I want to emphasise – [HON. MEMBERS: Inaudible interjections.] –

THE TEMPORARY SPEAKER: Order Hon. Members, let us hear the Hon. Member in silence please.

HON. GABBUZA: Mr. Speaker Sir, I strongly believe that the more I listen to people talk about bond notes, the more I become more sceptical on whether it is going to solve the intended problems.  Bond notes are supposed to solve our cash crisis, but I do not think that only bond notes will be a solution.

Therefore, there are certain things that I think the Minister must consider.  Why do I have scepticism on bond notes being a solution to our cash problems?  Firstly, we are giving incentives of 5% to the chrome industry and the gold sector, which are the only things that are there in terms of exports.  If you look at a gold or chrome plant, even if you give them a 5% incentive, if the capacity of the processing plant is to produce 10 tonnes, no matter how much incentives you offer, that plant will not produce any excess, so that 5% will not result in extra production at all.  The plant is built to process a certain amount of commodity or mineral output per month or per day.

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