Fifth and bordering on criminality and sabotage, bids for foreign exchange on the auction are not always translating into further retooling or more importation of raw material for expanded manufacturing activity. By and large, retooling is done, with raw material requirements fully known. Economic activity remains at current levels. Clearly, we are seeing proceeds from the auction finding their way into pockets of speculators; or worse, getting illicitly transferred beyond our borders for stashing; for supporting mother companies or simply as sequestered cash assets. We even have had cases of importers of wheat and edible crude oil using shelf companies domiciled in countries that grow neither wheat nor soya! Such shelf companies are conduits for transfer pricing, and thus for externalisation. All these are acts of downright criminality.
Here at home, activities in the black market now go beyond currencies. They now include redirecting basic goods into the informal sector where big companies have created a web of agents who sell such goods exclusively in foreign currency! Not only is the consumer hard done by; Government is prejudiced in that taxes are evaded, ironically by the same businesses Government will have foster-cared, funded and grown through the auction system! Formal retail channels are no longer being used to reach the market, in favour of self-created agents who operate in the twilight zone of informality and downright tax evasion. Our multi-currency policy is also undermined as Zimbabwe dollar-earning workers are now being forced to buy basics priced exclusively in foreign currency.
We are even aware of certain businesses which deliberately disable point-of-sale gadgets in order to force the consumer to buy key goods in one currency, contrary to the law of the Land. Maybe the time has now come for Government to insist that such businesses who do such tricks should suspend trading until they are able to technically handle transactions in multi-currency, as is bade by our laws.
Let me say that we made all the above concessions in good faith, and in the belief that we have a responsible business sector whose sole purpose is to manufacture and sell goods and services in the marketplace. Yet it is becoming increasingly clear our trust is getting abused and even betrayed. We even wonder if at all we are dealing with Business anymore, or with politicians disguised as company executives, seeking a political upset. Privileges can be withdrawn; the same way they are granted. Equally, politicians seeking to engineer market failures for definite political outcomes will be dealt with as political opponents, and through rules appropriate to politics.
Above all, short-circuiting set rules and cutting corners in business attract very stiff sanction. Those who break our exchange control rules, or who money launder, will only have themselves to blame. No one in business should doubt my Government’s resolve to correct blatant market failures, and to counteract and foil sinister moves to destabilise our economy. Government’s responsibility is to protect the consumer, and to ensure stability in the market and inside the country. We will take all measures necessary to ensure there is stability, including painful ones should that ever become necessary.
I am disappointed that while I am on a mission to explore ways to clear arrears and to resolve the national debt, certain elements in Business think it helpful and appropriate to disturb the macroeconomy. Is this not the time when both Business and Government must show greater unity in order to pacify, give comfort and confidence to our creditors?
We all seek lasting solution to these challenges around arrears and the debt, surely? Both have held us back; their resolution will see us lurch forward on a sustainable economic trajectory.
Except it takes responsible business players, imbued with a serious national outlook to see matters this way. Is that too much to ask? I hope not.
By President Emmerson Mnangagwa for the Sunday Mail
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