The new system would have transformed the Railways of the region as these would have had to be upgraded to carry fuel to all regional market from Harare. Foreign currency earnings of the railways in Zimbabwe would have exceeded US$200 million a year.
This project was to be a purely private sector initiative although the investors proposed to give both Mozambique and Zimbabwe a 50 per cent stake to ensure strategic interests were protected. Wholesale prices for all fuels would have been maintained at world market levels – presently below US$0.50 a litre.
Instead of taking over this project from the GNU, the Mugabe administration choose to go in the opposite direction. The motivation? Not the interests of the region or consumers in Zimbabwe, but protection for the Cartel and the margins available on a corrupt basis. The project died. Self-interest won.
So where are we now? Immediately after the Monetary Policy Statement I got a call that said a young businessman had an allocation of hard currency from the RBZ to buy fuel in bulk from South Africa. He did not have an import license and asked if I would recommend someone who did and who could handle local sales. Does that make sense to you? It certainly does not to me and I know a great deal about the local industry. My father was an oil company executive and fuel controller for the Federation. It smells of corruption in the allocation of hard currency and in fuel distribution and sales.
And so we have chaos – deliberate, organised chaos in local markets with the majority of poor consumers queueing and suffering in silence. Yet the solutions are so simple, scrap exchange control, give exporters full control over their revenue streams and allow market forces to distribute scarce resources such as hard currency and fuel on a competitive, open market basis. No subsidies, no queues for anything. Sanity at last.
Last of all get our infrastructure fixed so that we can move our needs efficiently and in a cost effective way. Get the railways back on their feet, get the pipeline back under private control with State supervision, get tariffs down to world market levels, get the new pipeline built and turn Harare into the energy capital of SADC and do it now!
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