Tackle root cause, not symptoms

Tackle root cause, not symptoms

Source: Tackle root cause, not symptoms – DailyNews Live

Eric Chiriga      14 November 2017

HARARE – Zimbabwe’s celebrated music superstar, Oliver Mtukudzi, has a
popular song titled Handiro Dambudziko, which has lyrics that go –
Kushingirira kurapa mhopo pamusana…mhopo iripamusana iwe uneziso
rinembonje.

Translated to English, this means putting much effort in curing the
symptom but not the root cause.

And that has been the disappointing approach by Zimbabwe’s government in
addressing the country’s mounting woes.

In yet another move which proves that, Industry and Commerce minister Mike
Bimha has announced the easing of import controls, amid skyrocketing
prices and looming shortages of basics. He argues the move will guarantee
availability of basic commodities and stable prices in the forthcoming
festive season, during which demand will be predictably high.

Bimha is quoted in a local daily as saying: “…we want to call upon
companies and individuals who have free funds to import basic
commodities…”

While emphasising that the recently introduced archaic, tried and failed
price monitoring system will be further enforced, he went on to say: “You
will recall that some of the basic commodities were removed from the Open
General Import Licence and were now covered under various Statutory
Instruments (SI), including SI 64 of 2016.”

“But as we had said time and time again, these SIs such SI 64 of 2016 were
not intended to ban the importation of products but were intended to
regulate their importation and where we believe that there is demand
exceeding supply we will obviously want to facilitate the importation of
such commodities which is the case in point because of the demand as a
result of the coming festive season and again because of the limited
foreign currency available to local producers we would want to make sure
that those with free funds be they individuals or companies they should
come forward to obtain the necessary permits and licences to bring
products into the market.”

Well and fine. For sure, basic commodities need to be available. Though,
not only during the festive season.

The approach must be to ensure basics are available all the time. But
crucially, relaxing the import controls is not the solution to the price
increases – inflationary pressures – Zimbabwe is now facing.

This crisis is not happening in isolation. It’s a mere symptom of a much
bigger, unaddressed – probably conveniently ignored – problem.

There is a root cause to this deepening crisis.

And Bimha’s appeal to those with “free funds” to import goods is a clear
admission that the desperate measures imposed by government are failing to
curb the crisis.

But while other stakeholders – who have been hurt so many times by
government’s ill-advised policies while they remain silent – could be
afraid of telling authorities the brutal truth, Confederation of Zimbabwe
Retailers president Denford Mutashu, seems to have bit the bullet.

Government must address the root cause, he insists.

“Price hikes are an indicator that the economy is not well and there’s
need for a holistic approach to solve the current foreign currency
shortages and increase production,” Mutashu told a local weekly recently.

“When government makes it easy for companies to increase production,
prices will automatically tumble. The recent price increases show that
there’s a shortage somewhere in the economy,” he said, adding that the
price controls, which the country also imposed 10 years ago at the height
of hyperinflation, distort market conditions and lead to shortages.

“Price controls have never worked in our economy and we are not sure if
they will work in the current context. They are short-term solutions and
the country requires a long-term strategy to deal with foreign currency
shortages,” he said, adding that prices are determined by laws of demand
and supply in an open market.

Mutashu is spot on.

As long as government continues on this path – skirting the real cause and
playing the blame game – Zimbabwe’s woes are far from over.

Very far.

And the root cause is a no-brainer.

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