By Dr Gorden Moyo
HARARE – A MONETARY policy is measured by its potential to address the problems facing business, labour and the generality of the population.
I am afraid to say that the latest monetary policy pronouncements do not fully address the concerns of business, labour and the rest of the people in Zimbabwe.
The Policy measures do not address the perennial questions of subdued production, lack of export incentives and lack of trust building blocks for both domestic and foreign investors.
In a strange twist of logic, the proposed measures read together with recent measures announced by the Minister of Finance and economic development, seek to punish the struggling informal traders with punitive taxes.
The idea of the formalisation of the informal sector cannot be achieved through coercion. Informal traders are willing to deposit their proceeds but they cannot, because of high bank charges, history of losing funds in banks and many other policy absurdities that Zimbabweans have endured over the last two and a half decades.
Crucially, the policy measures do not address the troubles of ZiG. It is not enough for the RBZ to stockpile gold worth US$550 million. A currency cannot be backed by gold alone. The route to currency stability goes via public trust, local production, financial discipline, demand and supply for the currency, curbing of illicit financial flows as well as job creation among others.
On the contrary, monetary policy measures show no signs of addressing the above. Consequently, any featuring analysis of the policy measures will lead to the conclusion that the situation will be worse off in the next 3 to 4 months.
More and more retail shops will close, some basic commodities will continue to disappear from the shelves, poverty will continue to deepen, inflation will continue shooting the ceiling and the ZiG will continue to proceed towards the fateful end of the Bond, the Zimdollar and all its predecessors.
Dr Gorden Moyo is a former Minister of State Enterprises and Parastatals in Zimbabwe. He is currently a director at the Public Policy and Research Institute of Zimbabwe (PPRIZ). His research interests include public leadership, public participation, public institutions, developmental states, civil-military relations and conflict resolution. He holds a PhD in African Leadership Development from the National University of Science and Technology (Zimbabwe) and a Master of Arts degree in Peace Studies from the University of Bradford (UK).
