In terms of extermination of the premium between the black market and the official, at the moment in terms of where we are as a country, what we can only do is to reduce the premium between the black market and the official. Obviously, in terms of policy for us, what we would want is a situation where there is total convergence between the black market rate and the auction rate. However, in terms of the reality that is on the ground at the moment, what we can only do is to come up with policies that are going to narrow the gap between the black market and the official market.
Now, since that premium is going to remain, the question is – what is going to happen to the ordinary consumer who is in the rural area when the black market rate is being used for pricing purposes? Where the premium between the black market and the official rate is very small, the difference is normally not felt because of competition. This is why we are saying there should be a reduced premium between the black market and the official market.
In terms of the other issues that he mentioned, the Presidential Powers were effectively used to protect the national interests of this country; to protect the economic interests of Zimbabwe and there is no ill intention other than to protect Zimbabweans and the economic interests of the country.
In terms of us as Treasury authorities, there is no going back in terms of the policy trajectory. We are not going to interfere with the nostro accounts of individuals and corporates. This is the assurance I am giving Hon. Members and the nation, that their accounts are not going to be touched. What we would want is; let us operate within the confines of the law.
On exchange rates; it does not make sense for one to have millions of useless dollars. Exchange rate can be any figure but what is needed is stability to allow businesses to plan. Our challenge is; we are having business persons, not entrepreneurs. We are interested in big figures that do not mean anything. This is why you see that we have got a challenge.
We can have any exchange rate. We can increase the exchange rate today – 1:200; 1:300; 1:400 but that is not going to generate forex. We can only generate forex through production. So, it is very important for Zimbabweans to understand this fundamental point. Stability works for all of us. Corporates have been reporting good results and all of them were saying the good results are anchored in the stability that we got from the Transitional Stabilisation Programme. Why would corporates be involved in illicit and black market things that are going to destabilise the very market which is giving them profits? I think this is where we need a total reboot of the business-mind so that at least we know that it is not the figure that is important but stability.
There is a question from Hon. Nyabani. We are talking the same language. *He said priority should be given to those who do production. He also asked the criteria used to come up with the priority list for those in the same sector. When companies come to the auction floor, they come with their rate. A company can come and say I want to sell my money with a rate of USD1 is to ZD90 and someone says I want to sell with USD1 is to 100. If they are all for production, we consider the one who has come with a higher rate and this is how this auction works. So you can see that we encourage that farmers come with their own rates. This is how that Dutch system works; but in terms of the rate which is the price discovery, we use the weighted average. However, I want to assure Hon. Members that we are focusing on production. If I use the example that you have used, I might not know how they do it, but companies like OK have some of its branches which does repackaging and so on which is part of the value chain as provided for in the National Development Strategy 1 under local beneficiation.
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