Economic stabilisation steps 'inadequate, unhelpful'

HARARE - Long-suffering Zimbabweans have expressed disappointment in the government’s latest economic stabilisation measures that were announced on Monday, adding that they feared that things could take a turn for the worse in the country.

In a bid to mitigate rising prices and the acute shortages of foreign currency in the country, authorities announced a raft of new measures then, which they hoped would go a long way in halting the local economy from declining further.

However, a wide cross section of Zimbabweans who spoke to the Daily News yesterday said while they appreciated the fact that authorities were trying to mitigate the dire situation in the country, President Emmerson Mnangagwa’s government had missed “a trick” with its new steps.

They also feared that most of the measures announced by Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya were likely to end up hurting ordinary people, instead of offering relief to citizens.

Of major concern to many people was the shockingly high government debt that was revealed by authorities, as well as the new taxes on electronic transactions and the controversial move to create Foreign Currency Accounts (FCAs) for exporters, while leaving the rest clutching onto their RGTS accounts which are now effectively Zim dollar accounts.

An unimpressed Zimbabwe Congress of Trade Unions (ZCTU) warned that there could be a serious backlash from disgruntled workers on account of the new steps, as ordinary people would now have to contend with the “punitive measures”.

“We have been inundated by calls from workers around the country who are complaining bitterly. As an organisation we are very worried about the mafia-style of policy formulation and implementation that has been adopted by the government.

“How can government just announce such policies with such a huge impact on all citizens without any consultations and notice?

“This simply shows that we are in trouble as a nation. Modern governance norms call for national debate on such issues before implementation. We should all have been given an opportunity to contribute inputs.

“Stakeholders ought to have debated the impact of such measures, both negative and positive,” said ZCTU president Peter Mutasa.

“Citizens or workers are failing to make ends meet and the government is now coming in to squeeze their last breath.

“This is an attack against the poor. Workers of Zimbabwe are heavily taxed and cannot afford new tax increases.

“We have scheduled a general council meeting this week and am sure a decisive decision is going to be made on the action we will take on all this,” Mutasa said further.

Economist Godfrey Kanyenze concurred with the ZCTU saying Ncube’s new two cents tax per every dollar transacted was “ill-advised and retrogressive”.

“The two cents per dollar tax is a retrogressive and unfair tax because all along government has been encouraging people to use electronic transfers and point-of-sale machines to move away from physical cash.

“They have been promoting financial inclusion which was the very purpose of mobile platforms such as Ecocash, One Wallet and others which reached places that were previously unbanked like the rural areas.

“But now, by charging these people two cents to the dollar transacted, it means therefore that the government is penalising those that are poor,” Kanyenze told the Daily News.

The Zimbabwe Human Rights Association (ZimRights) said the government’s new measures “would once again” deprive ordinary people an opportunity to enjoy their social and economic rights.

“The increase of electronic transactions to two cents per dollar makes anybody who is very poor remain poor. There is clearly no government will to uplift the standards of people who are very poor.

“These are moves by a desperate government … Let’s do away with the bond note, let’s go back to where we used to be in 2009 when things moved very well with that multi-currency system, but without our own currency,” ZimRights executive director Okay Machisa said.

On its part, the Crisis in Zimbabwe Coalition said both Ncube and Mangudya had sent “a signal that the poor were the biggest losers”.

“The increase in taxes is equally a measure of a government which has an appetite to consume without taking care of the golden goose which lays the eggs.

“At the same time, there is no evidence that the taxes are being used to help the people of Zimbabwe through service delivery.

“In terms of government policy, this has exposed the government by sending a message that the poor are by themselves, with no one to protect them, while the rich are protected,” Crisis in Zimbabwe Coalition spokesperson Tabani Mpofu said.

Presenting his post-election Monetary Policy Statement (MPS) on Monday, Mangudya announced the re-introduction of FCAs to allow foreign currency earners to hold their hard-earned cash away from RTGS accounts which — although denominated in US dollars — cannot be withdrawn on demand and are not “real” greenback accounts.

“The government is acting unconstitutionally and violating Section 68 by introducing a new RTGS currency which is not recognised at law.

“The law says we have a basket of foreign currencies. On what legal basis do they wipe all that out in a random proclamation. Mugabe days are back,” constitutional lawyer Fadzayi Mahere railed on microblogging site Twitter.

Another constitutional lawyer, Alex Magaisa, said the government had displayed “insensitivity” by introducing FCAs and new transactional taxes without considering the plight of ordinary people.

“What government really meant to say is that the United States dollar you deposited doesn’t exist anymore ... we call them RTGS FCA — it’s pretend forex, we admit that the bond note has failed and we haven’t yet got new lines of credit so we have come back to squeeze some dollars from you,” he said.

However, and while ordinary people were not happy with the separation of accounts, business largely welcomed the reintroduction of the FCAs, which it said was long overdue.

“The separation of the accounts will help to ensure that those that generate foreign currency are assured of their money because forex is actually private property. Now, they will at least have rights to their forex.

“The separation will also ease some of the challenges that exporting businesses have been facing. As more exporters have confidence in that policy, it will lead to more people exporting and then hopefully, our forex balances will grow,” said Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe.

But business also bemoaned the new tax on dollar transactions that were introduced by Ncube in his fiscal policy statement.

“We are … concerned with the two cents per dollar transaction fee introduced by the minister of Finance in his fiscal measures.

“We believe the  cents per transaction tax should have been kept because when this measure is applied to RTGS’, it means that every business now has a burden of two percent increase of cost of doing business,” Jabangwe said.

Comments (17)

I find it shocking how Zimbabweans keep attacking govt without offering an alternative. It is my humble view that the monetary policy given by govt provides Zimbabwe with a good starting point going . There is need for Zimbabweans to believe in ourselves accepting that together we can conger. Both private and public media must therefore be positive about the transformation currently taking place in Great Zimbabwe. Media must now engage govt and pressing it to act positively in resuscitating the economy.

Shumbayaonda Tarwirei - 3 October 2018

Zimbabweans are not attacking government but if government keeps saddling people with heavy taxes on everything including mere transfers as a way of plugging a debt hole created through subsidising mashefu...who frankly have the capacity to pay then they have a right to be sceptical. We have been burnt before, we have seen the skewed priorities of this government. It is right and reasonable to be suspicious.

Ethan Mufaro - 3 October 2018

True that,all you see in our media, it doesn't work, negativity etc. Why can't someone hold gvt to account for the plans by constantly following and updating their programs.

Panenyaya - 3 October 2018

Tarwirei you are not in sync with what is happening in the economy. You think its good for gvt to milk the poor in form of harsh taxes as the 2% per dollar per transaction. This is a gvt which has never cared about its citizens. They want poor citizens to fund their big stomachs. Who introduced bonds notes, who wired electronic money into banks and today they come out to say our savings are no longer US dollars, Day light robbers, ZANU PF are robbers, they bought our USD with bond notes 1:1 and today they say bond notes are not USD.

Baynda - 3 October 2018

The robbers are back to rob us the 2009 style, MBAVHA DZIYE DZADZOKA. Shit monetary policy, full of Shit.

Malaya - 3 October 2018

Zimbabweans need to wake-up because if we don't, these ZANU politicians will milk us to death for their own luxury, what is that harsh 2% tax for, so its better to go and get cash from the bank, electronic transaction NO, too expensive.

Mapika - 3 October 2018

If they think we are going to deposit USD into banks, forget it, these Maroons have a history of raiding private foreign currency accounts to satisfy their appetite for luxury. Trust who? Zim banks and their reserve bank kkkkk, yesterday they printed green leaves and said it was money.

Marowa - 3 October 2018

Mangudya and Mthuli are going to get this economy dead, did he calculate what 2 cents per dollar means. We are taxed left right and centre in this country, my salary is taxed, the net I am left with, I go buy goods and services and taxed again, transact on financial platforms 2% tax, so how do I survive, are we going to be working for govt. The taxes in this country are too much!!!!!!!!!!!

Baba Mary - 3 October 2018

What a shame to have two people who are supposed to be educated in the like of Mangudya and Prof doc Ncube writing nonsense. One time we were told bond note is at par with US$ now we are told noways the two are exclusively different. We knew this was coming but what we did not expect was the winding statement in the form of a policy statement... one wonders where these two got their education from????!!!

garikayi - 3 October 2018

Stupid, unhelpful and anarchist Daily News headlines! The tax rate is actually 0.02% and it will be capped!!

Mzwazwa - 3 October 2018

You seam to know how to fix it give us your suggestios what is it that needs to be done

DAVID - 3 October 2018

the pfrerrorist govt forced their way into govt and we are slowly dying a natural death until someting is done as a matter of urgency

fati - 3 October 2018

Everyone is going to suffer bcoz of this poor thinking by this govt the soldiers police and cio but we last year in November we tasted how sweet it is to work with these security organs to fix our problems . All they have to do is protect us as peacefully free ourselves from the govt that is causing misery and untold suffering to us security and their families included .This is the only way out . We can bring best economist on the planet into this country but with zanu IN POWER nothing will work .

Diibulaanyika - 3 October 2018

I am amazed if not disturbed by some of the comments above. I suspect the contributors are either already on the gravy train or about to board it soon. Its difficult to understand that the government should not be held responsible for the deplorable management and the shambolic state of the economy after nearly forty years in a one party state. One wonders whether the leaders should be allowed to flounder and destroy the country with impunity unless the hapless and trodden down electorate can come up with alternative solutions ?. The government was elected on the promises it made to overhaul the economy and it should therefore be held fully accountable for resuscitating and managing the economy. With the keen intellect and capacity of people like Mthuli Ncube, the gap between theory and practice should now be receding. Regrettably most of these guys bought into a mirage and accepted poisoned chalices where they now find themselves attempting to breathe life into a comatose system. This serves as a reminder to all the other professionals out there to think carefully before accepting the trinkets and false hopes that ZANU is dangling in front of them. That moribund party needs substantive internal reforms before individuals can come in to implement any concomitant changes.

Jaikolu Maison - 3 October 2018

marmalade situation .. (indeed bitter) for the ordinary women and men

UNKNOWN - 3 October 2018

In our household this 2% charge will result in a fourteen fold (1400%) increase in taxes on swipe/transfer transactions. This is unacceptable.

citizen - 3 October 2018

For some like Mzwazwa who are finding mathematical calculations to be a challenge.... 2 cents for each dollar is 2/100 = 0.02, which is 2%!!!!!!!!!

garikayi - 3 October 2018

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