Africa-Press – Zimbabwe. EXILED former cabinet minister, Jonathan Moyo has warned that the recent threats by Finance minister Mthuli Ncube to crack down on businesses over price hikes will only worsen the already dire situation.
The recent collapse of the Zimbabwean dollar against the USD has resulted in price hikes in supermarkets which are now doubling prices, making commodities more expensive in a bid to break even.
In an interview with the state-run Sunday Mail, Ncube promised a crackdown on big businesses which he accused of allegedly conniving with illegal foreign currency traders, as well as retailers who unjustifiably raise prices of basic goods.
Ncube said the price hikes were unjustifiable warning government would force them out of business by withdrawing their licences.
But Moyo, who had earlier last week accused Ncube of turning a blind eye to the deteriorating economic situation took another swipe at the under-pressure Finance Minister over his threats of a crackdown on businesses.
“One key defining feature of human beings as a species is that a better today is an expression of past experiences and lessons learnt. One compelling lesson learnt is that the national economy is at all times best managed through economic policy, to influence and shape desirable economic choices and economic behaviour that benefit the common public good,” Moyo wrote on Twitter.
“In this connection, a crackdown of whatever kind is not an economic policy. It’s the sort of thing that can easily make a bad situation worse.
He added: “As seen in the past, when – as is now happening- retailers start pricing their goods in US dollars [instead of the precipitously falling rtgs ZWL] amid spiralling price hikes across the economy; and then that gets the authorities to respond by threatening or effecting a crackdown on businesses, goods predictably disappear from supermarket shelves and find their way in the darkmarket in streets and backyards.
“For many reasons, it would be prudent for the authorities to find better policy interventions than the threatened crackdowns, whose deleterious consequences on supermarket shelves, consumer pockets and dinner tables are now well known!”
United Refineries chief executive officer (CEO) Busisa Moyo also added his thoughts on the current crisis this Sunday on Twitter.
“Multiple exchange rates and absence of a ‘formal and market accepted single exchange rate’ for prices, incomes and wages are the root cause of the current Zimbabwean crisis.”
He lamented: “For the Rand, we know it’s ZAR19.30 but for the ZWL, we have four rates causing arbitrage. We have gone too long with this anomaly.”
Due to exchange rate disparities and hyperinflation, prices of goods continue to sour with people calling for the use of one currency or for government to consider dollarising the economy.