Address problems faced by industry

HARARE - The worsening shortages of foreign currency, particularly the United States dollar, underline the mammoth task that government faces in its quest to make things work again.

Part of the problem we face as a country is that when former president Robert Mugabe and the late MDC leader Morgan Tsvangirai reached a political settlement in 2008, it appeared as if our economic troubles would be solved by that pact.

The Global Political Agreement (GPA) paved the way for the consummation of the short-lived but stability-inducing inclusive government which was realised on February, 2009.

Zimbabwe was coming from a hyperinflationary environment which wiped off the local dollar and it would not have been a bad idea had the leadership chose the South African rand as the anchor currency.

South Africa is and remains the country’s biggest trading partner — meaning that the wider circulation and promotion of the rand would have cushioned our exporters from the problems they are currently going through — having problems in accessing the elusive United States dollar.

But this is where we are and what’s done cannot be undone, to quote the words of author William Shakespeare in the play Macbeth.

Government should seriously look at the dangers of re-introducing the local dollar when the economic fundamentals are not right.

President Emmerson Mnangagwa has hinted on the return of the Zimbabwe dollar but has not said when although one can speculate that this could be in the near future.
The worsening forex shortages are symptomatic of a deep-lying problem which needs urgent attention.

As long as the local manufacturing industries are operating below their maximum capacity, such as the current situation, it would be difficult to build foreign currency reserves.

Without deep foreign currency reserves it would be difficult to bring back the Zimbabwe dollar in the near future.

Just last week, the governor of the Reserve Bank of Zimbabwe John Mangudya, attributed the widening shortages of foreign currency to an expanding economy whose expansion is not matched by fast-paced production.

Effectively this means that whatever foreign currency is generated, it won’t meet the needs of the nation.

Low or little production means more imports which eat into whatever little is in the kit.

The expanding economy in the absence of meaningful production could hurt us big time unless government prioritises industry in forex allocation.

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