Why are Zimbabweans with free funds looking for Zimdollars when they need US dollars to import, Minister asks?

Hon. Gonese, let those businesses access foreign currency because if we do not, this will result in shortages and what percentage of transactions have been done outside the auction? Thank you so much Hon. for the question. In terms of the initial impact of SI 127, I think we should all agree that what is happening at the moment in the market is illegal. Guided by Vision 2030, we said Zimbabwe is private sector land but we only do interventions where there is market failure.  Now, what we have seen is rampant increases in prices both USD and Z$, which is not really bordering on production costs. This is bordering on greedy, profiteering and has nothing to do with production fundamentals.

Now, the Hon. Member is saying this is going to result in shortages. I would want to assure the House that we are not going to control prices. We will allow businesses to thrive and come up with their own pricing models but what is very critical in economics is effective demand. You can increase prices the way you want but what is critical is effective demand. When you have increased your prices, are people going to buy? You can only buy where there is no choice but look at how the Zimbabwe economy is dichotomised between the informal and formal sector. Price controls are not going to assist us as a country, they will take us back but as I have mentioned, there is the issue of effective demand and then the issue of import parity.

We are not banning our people from importing. I know this is going to give a strain again on the demand for forex but what I can assure you is that in the medium term, there is going to be sanity because of lack of effective demand. So Hon. Gonese, I can assure you that there are going to be changes. It happened last year and after some two to three weeks, we started to see prices going down and I can assure you that prices will go down.

Then a question from Hon. Brig. General (Rtd) Mayihlome, confidence in the banking sector as people are not depositing because we have got high charges. Let me respond to this one. At the moment, the banking sector is holding up to US$ 1,3 billion. Hon. Members, I am sure you can hear these statistics. We have US$1,3 billion sitting in the accounts of banks. This is real hard US$ cash but then we look at the other forex which is being generated from say the informal sector and even the other formal channels, it is not being banked because of high charges. We have engaged the Bankers Association of Zimbabwe.

Again, in the spirit of us not intervening in terms of what charges should be used by the banks, we have been using moral suasion to speak to the banking sector to say the charges are too high; but what they have also explained to us; is they are using outside imported banking platforms which are expensive and they would need to be paid in foreign currency. What we have also agreed with them is – why can we not have local solutions that will ensure that we do not import software. This is where we are and the Bankers Association of Zimbabwe have assured us that they are working on making use of local IT solutions but at the moment this has been reported to us and we are aware that bank charges are too high and are moving against the policy of the Government of financial inclusion where we are saying our people, our businesses and our corporates should be given the opportunity to transact through the normal banking systems.

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