In the monetary policy statement, it is clear that only the working people are going to lose value. The “know your client” principle referred will affect mostly the poor who have not earned value from international sources in a long time.
Then comes the insanity around foreigners paying for services in forex, this is an unenforceable insanity. The gentlemen are probably intoxicated by a high grade of Indian hemp so potent that it needs to be protected by a patent.
This creates a whole lot of problems including the introduction of middlemen in purchases of basic goods.
We have always stated that the bond note must be repealed, that would be the end of story. The move to create two types of accounts borders on illegality, such acts must never happen in a democratic society.
The government is introducing a new currency through the back door in violation of the RBZ Act with all its flaws.
The government has demonstrated capacity to raid accounts whenever they are desperate, they will at some point raid the NOSTRO accounts.
As of now even by Ncube’s confirmation RBZ net claims against the government have exceeded the legislated limit by more than 300%.
Ncube even states that the government will not stop issuing toxic treasury bills, he instead modifies them and tries to bring in an auction element which will not curtail government spending.
These so-called measures are half baked, we therefore restate the following suggestions we made in our SMART policy document.
- Fiscal consolidation by, inter alia, pursuing of a primary balance and restoration of balanced budgeting.
- Rationalisation of expenditure and improving the expenditure mix.
iii. Building capacity on revenue management and strengthening public finance management systems.
- Taking measures to reduce debt and improving debt management to reduce the risk of inflationary pressures, crowding out of private sector activity and exacerbation of liquidity shortages.
- Expediting State Owned Enterprise (SOE) Reform.
- Rationalisation of the public service and elimination of ghost workers to reduce employment cost to 30% of total expenditure.
vii. Expansion of the revenue base through increased productivity, and expansion of the economy.
viii. Immediate resolution of the cash crisis by addressing confidence issues, scrapping the bond note, strengthening the multiple currency regime.
Continued next page
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