Zimbabwe government biggest loser when there is a discrepancy in the exchange rate

HON. GUMBO: My supplementary is, economics is a practical reality and whilst we accept that fundis can go to college, school and learn theories, economics at the level of governance must be practised and it must be practical. It is a reality that over 60% of the goods we find on our shelves in Zimbabwe are imported goods. That is a reality and to import, retailers require foreign currency and the biggest retainer of foreign currency in this country is the Government. The same Government which has come to the people of Zimbabwe and imposed, not a market based – [HON. MEMBERS: Inaudible interjections.]- Mr. Speaker, can you protect me.

THE HON. SPEAKER: I can only protect you by asking you to ask your question.

HON. GUMBO: Indeed Mr. Speaker, you are protecting those I must be protected from. So, Government being the biggest retainer…

THE HON. SPEAKER: Ask a supplementary question, proceed with your supplementary question.

HON. GUMBO: When a question is being asked in context, these are real economic issues. Now, that Government is the biggest retainer of foreign currency, let us not lie that we have market determined exchange rates because the question was in trying to cure the challenges between the imposed exchange rate and the problem retailers are facing. Why does Government not allow for retailers to offer discounted USD or forex prices in their shops that motivates consumers to buy in USD and capacitates these retailers to import goods and products using foreign currency which is within the consumers? You did not answer that.

THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Indeed, Economics are a very practical subject. I am not an Economics student, but there is no economic theory for multi-currency. That is the reality Mr. Speaker and if I can highlight the easiest thing for Government to do will be to dollarise but that will be the worst thing that we can do for our country. It is the easiest thing, but it is the worst thing that we can do – [HON. MEMBERS: Hear, hear.] – What will happen overtime, over years is that Zimbabwe will de-industrialise some of the progress that we will be making as a country, we will see those dividends dissipate. 

Our children will have no jobs in the future. We will become a supermarket of other nations. We will attract the worst elements. These are the effects of dollarisation. I agree it is the easiest thing to do, but it is the worst thing to do for the country. What you are seeing is a competition between the ZiG and the USD within our economy on a sliding scale, which we want to reach full de-dollarisation by a certain period. It will not be easy or smooth. There will be need for restructuring but if we allow a system of parallel market dictates which is led predominantly by speculators, it is the final consumer and the people who will be at a loss in all this. 

Mr. Speaker Sir, the problems we face are a cocktail of three groups of people, I would say. You have retailers who are sticklers for the law and will follow whatever policy is there. You have some who lag behind and then you have a large group who are just greedy. Regardless of how good law as a policy is, they will find ways to arbitrate that and it is easy under the current system that we have, allowing a discount based system will defeat the purpose of our de-dollarisation agenda. I think His Excellency has been very clear, we are on the roadmap to mono-currency. We are on the roadmap to have as a sovereign nation, our own currency. So, all these measures that are being put into place are meant to protect our local currency. Again, it will not be perfect, not be smooth, albeit it might have some mistakes, but we learn from those and continue to try and do the right thing. I thank you.

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