Bulawayo (New Ziana)-Government will descend heavily on unscrupulous businesses that are using the unofficial exchange rate as this is distorting the market, making goods and services expensive, a cabinet minister has said.
Finance and Economic Development Minister Mthuli Ncube said this after touring the US$20 million student accommodation facility in Riverside being constructed under the Public Private Partnership (PPP) between the Infrastructure Development Bank of Zimbabwe (IDBZ) and financial services group Old Mutual.
The government recently suspended trading licences for 17 pharmacies that were using parralel market exchange rates in violation of its monetary policy and anti-money laundering regulations.
Through its economic blueprint, the National Development Strategy 1 (NDS1), the Second Republic has made some strides in stabilising the economy, the exchange rate and prices of goods by implementing a number of fiscal measures.
“As government, we have noticed that some shops right across the board have been using implied exchange rate which is way above what is acceptable in terms of the market-determined rate,” said Ncube.
“This is unacceptable. We have been very tough on them and recently as you saw we recommended the withdrawal of trading licences for some players in the pharmaceutical sector. We are continuing to monitor others and we will not hesitate to withdraw trading licences.”
Ncube said the government expected businesses to follow the market forces in the movement of the exchange rate and not to hold out expecting that it would not last.
“It will last, we are determined to ensure that stability is engendered and solidified in the economy,” he said.
A survey by New Ziana showed that most supermarkets were still pegging prices on the parallel market rates of between ZW$8 500 to ZW$11 500 to the United States dollar, going against government policy measures.
Ncube expressed satisfaction with the performance of the economy over the last three years, noting that in 2021 it grew by 8.5 percent, one of the highest rates in Southern Africa.
“In 2022, the growth rate was 6.5 percent, again one of the highest growth rates in the region. This year, we expect a growth rate of 6 percent. This has never happened to have three succussive years of economic growth. It is unusual. It shows our policies are working and the economy is growing,” he said.
New Ziana
