Recently, Finance Minister Mthuli Ncube announced a supplementary budget of $929 billion, 19% of which is meant for capital projects.
The measure to suspend payments to government suppliers will delay public projects further and make service delivery worse than it already is. Suppliers are, effectively, being forced to accept payments below cost, making it harder for them to secure inputs or services, which they pay for at market price.
Government has accused businesses of sabotaging the government, an old refrain that officials return to each time inflation flies off the handle. Government officials have taken damaging action against mobile money platforms, Old Mutual, the stock exchange, and even banned bank loans for a period, all to push the blame for inflation on someone else.
All the while, government was waving away critics who pointed to the fact that inflation was getting its fuel from the government itself.
Last week, tucked away at the bottom of a lengthy Herald article by President Emmerson Mnangagwa’s spokesman, George Charamba, was an important admission on inflation; it was us all along.
“The public sector has been stoking money supply…the State, through its various Ministries, has been discharging into the market more than $10 billion a week, through payments, all of them consumptive,” Charamba, wrote.
He went on: “This is hardly surprising: the State accounts for upwards of 75% of purchases in the market. I would not have minded if this stupendous amount related to payments for productive activity. No, all of it went towards consumptive activity. Number One is now seized with the matter and this gargantuan public tongue will now be restrained.”
Government is only now admitting to its role in stoking inflation, a string of damaging and needless Statutory Instruments later. It is an admission that may be coming rather too late to put the breaks on the Zimdollar’s decline.
It is an admission that does little to win back the long-lost confidence of the public, least of all businesses that have had to take dishonest finger-wagging from the guy who knew all along that he was the one who stank up the place. –NewZWire
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