THE economy has been under pressure over the past 22 years.
Illegal Western sanctions are the biggest cause of that pressure. Due to the punitive measures, local industry and commerce aren’t accessing lines of credit and investment from abroad isn’t flowing.
The Government isn’t getting balance of payments and other development support from the International Monetary Fund and the World Bank. Some companies cannot buy spares from abroad so their machines are down. If they are working, they are just creaking on. Others cannot export to some markets.
So the sanctions are, indeed, the elephant in the room. No doubt about that.
“To separate the Zimbabwean people from Zanu-PF,” said Mr Chester Crocker, then US Assistant Secretary of State on African Affairs in 2001, “we are going to have to make their economy scream, and I hope you, senators, have the stomach for what you have to do.”
This statement is proof, even to doubters, that the sanctions were meant to harm the economy, to make it scream.
While the sanctions are the main reason why our economy is under pressure, there is one local factor that is worsening the challenges we are facing. That factor is indiscipline among some of us.
Some businesses are among the biggest players on the currency black market, causing the national currency to weaken and prices to rise. Some have been in this business for a long time and faced no consequences.
The indiscipline had become so rampant that even companies that supplied the Government with various goods and services were among the biggest black market players. They would peg exorbitant prices for their supplies and had so much cheek that as soon as they received the payments from the Government, rushed to the street to use that money to buy foreign currency.
Given that the Government is the biggest buyer of goods and services in the economy, working to around 70 percent, the malaise was huge.
But it had to come to an end. And it has. Authorities recently stopped processing payments to suppliers who pegged their prices on the black market rate. The Government proceeded on Wednesday to blacklist 19 of its former suppliers whom it found guilty of abusing the country’s monetary systems to drive wild parallel market exchange rates.
Some of the firms would also purchase fast moving consumer goods from various manufacturers and sell them exclusively in foreign currency.
“After a careful analysis, it was observed that certain pricing behaviours and trends in the supply chain to Government agencies and ministries pointed to weaknesses in the procurement framework and that these loopholes contributed to distorted pricing practices by the market and effectively fuelled inflation in the economy,” Finance and Economic Development Minister, Professor Mthuli Ncube said in a release on Wednesday.
“It has been observed that some contractors after passing through the value for money process and having received their payment from Government still tend to siphon their proceeds into the parallel market thereby causing domestic inflationary pressures.
A total of 19 companies have been identified by the FIU (Financial Intelligence Unit of the Reserve Bank of Zimbabwe) to be involved in the unlawful conduct.”
He said the Government had blacklisted Nariox (Pvt) Ltd, New Age Marketers, Pepwit Investments, Tirumi Investments, Mwendo Africa, Alg World Investments, Lobmer Investments, Nisbank Investments, Sailgroom Enterprises, Wayvar Investments, Poweride Safaris, Azelion Energy, Blackdeck, Paza Buster, Redan Coupons, The Best Car Rental, Josam Enterprises and Construction Warehouse.
Prof Ncube and his team have done a great job, putting their foot down to not only name and shame, but also blacklist the 19 economic saboteurs. This must send a strong message that the honeymoon for those whose conduct harms the economy is over.
He and his team must keep the “salted” whip up in the air, cracking it on the back of the undisciplined whoever they are so that our economy stands a chance of progressing even under the illegal Western sanctions.
Article Source: The Chronicle