Currency stability critical for economic growth: Business

By ZBC Reporter
THE business community says currency and foreign exchange stability are critical towards promoting productivity, foreign direct investment as way of boosting economic turnaround programme.
This emerged at the Political Actors Dialogue Summit in the capital where various business organisations had the opportunity to discuss the current challenge in the economy and proffer solutions to deal with the obtaining challenges.
Zimbabwe National Chamber of Commerce(ZNCC) president, Tamuka Macheka, said productivity is critical for any nation to attain economic growth.
“Currency stability and exchange rate are very critical as they have an effect on prices, foreign direct investment as well as domestic productivity as they are affected by the stability of the currency. We need to deal with that,” he said.
Macheka further added that there is need to look at the country’s risk issues both internal and external perceptions, corruption as well as re-engagement process.
“In terms of perceptions, politics is being taken care of under this POLAD platform which shows that we are in the right direction which must also spill into building confidence for local investment. If you do not invest in your country who do you think would invest in your country. Corruption must be dealt with through investigation, arrests, conviction and ending with recovery,” he said.

Confederation of Zimbabwe Industries president, Henry Ruzvidzo, said foreign currency priorities need revisiting considering that the country has been grappling with currency issues for a long time and has affected the economic growth matrix.
“Progress has been made to de-dollarise though it is marred by inconsistencies such as the exclusion of other sectors to trade in foreign currency while some government departments are collecting revenue in foreign currency. This has reduced confidence levels among citizen. Most of the subsidy programme ranging from fuel, mealie-meal, agro-equipment have been hijacked by unscrupulous business people. Through dialogue and all hands on the deck approach we can achieve greatness as a nation,” he said.
Employers Confederation of Zimbabwe president, Dr Israel Murefu, believes the local currency was introduced prematurely, calling upon the monetary authority to restrict the money supply as per monetary policy targets.
“If we fail to stabilize the currency by mid-year or end of year we must look for an alternative currency. Fiscal discipline is very critical considering that government usually spend more than what has been budgeted for. We must demonstrate financial discipline before looking for outside financiers. The government must also make sure that they engage widely through consultations as we had more than 250 statutory instruments in 2019 which shows an appetite to regulate the economy,” he said.

Dr Murefu added that the culture of consulting must be inculcated into government and the tripartite negotiating forum platform will make a difference.
“Lack of policy consistency in terms of economic policy; sudden change has serious ramifications on the economy. Consistency brings economic predictability as investors can plan. The local business has sustained this economy hence the need to give them incentives as well,” he said.
The Reserve Bank of Zimbabwe Governor Dr John Mangudya recently said the positive de-dollarisation is taking place in the economy was encouraging, with key macro-economic indicators improving to support the move. De-dollarisation will be done gradually over a five-year period based on other countries experiences.