By Nkosana Dlamini
Top business group, Confederation of Zimbabwe Industries (CZI) says government’s planned clampdown on business leaders accused of fuelling economic instability through abusing Zimbabwe’s shaky currency exchange system could plunge the country’s fragile economy deeper into the abyss and further undermine public confidence on government’s economic reform measures.
In a statement Wednesday, president Kurai Matsheza urged government to abandon its heavy-handed policing of the country’s volatile exchange rate mess.
The Reserve Bank of Zimbabwe’s forex auction system has turned a mockery after businesses have sourced the scarce currency at the official rate to procure products and services while proceeding to peg prices using the black-market rate, seen as a more business friendly rating.
The apparent double-dealing practices by corporates has incensed government which has accused businesses of attempts to torpedo its delicately balanced currency reforms.
Matsheza said business leaders under the umbrella group have engaged authorities over the dangers of a drastic approach to dealing with business related infractions.
“As we had stated in our submission, a heavy-handed approach to a problem that has its cause squarely in a sub-optimal policy implementation creating arbitrage opportunities would be unsettling to the markets.
“It is our considered view that the measures agreed at the consultative dialogue should be given time to take effect as they are going to most likely cause an adjustment of behaviours in accordance with their efficacy on the challenges being addressed.
“Essentially at the centre of this is a policy correction, when policies fail we should not arrest people, we should correct the policies for efficacy.”
Added the group, “The arrest of business leaders will only serve to destabilise the relationship between business and authorities as the two need to work together to reindustrialise the economy in pursuit of Vision 2030.
“Fear will drive business decision making as has happened with the 2007 arrests with resultant shortages, as companies could not find any other ways of funding their forex requirements legitimately.
“The arrests will also cause unnecessary panic in the market and erode consumer confidence on government policies.”
CZI urged continuous dialogue among business leaders, RBZ and government to find an amicable way out of the current foreign exchange challenge focusing on averting the imminent crisis while creating sustainable solutions to solve the long-standing currency issue as a way to boost economic growth.