Source: ‘Black market sharks suppressing interbank rate’ | The Herald June 3, 2019
Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu said yesterday that some big companies that were getting the lion’s share of foreign currency when the Reserve Bank of Zimbabwe was allocating forex were now frustrating the success of the interbank forex market system.
Addressing delegates to the Bulawayo Zanu-PF Youth League one-day conference held at the party’s provincial headquarters, Davies Hall, under the theme “Zimbabwe Economy, Industry and Youth Opportunities”, Minister Ndlovu said the same companies who were big beneficiaries of RBZ forex allocations were now working to frustrate the success of the interbank market because they were thriving on the black market.
“We have sharks that are thriving on the black market and are doing all within their powers to suppress a smooth migration into a formal trading system where companies can access foreign currency from the interbank market.
“These are the same big guys who were big beneficiaries of the Reserve Bank of Zimbabwe system of forex allocation. They are now seeing a situation whereby everyone is equal in the market and all that one needs is his or her RTGS money to buy foreign currency on the interbank market. This is the reason why they are now resorting to putting spanners in the works so that the system fails,” he said.
Minister Ndlovu said what is disturbing is that it was the private sector that pushed for the interbank system which some of them were now working against.
Turning to incessant price increases, Minister Ndlovu said Government was worried that the same companies that were continuously increasing prices of commodities were not increasing workers’ salaries.
He said arbitrary price increases showed dishonest by industry players because the increases were not justified. “We have seen an unfortunate scenario where companies are trigger-happy to increase prices, but are not doing the same when it comes to workers’ salaries even when Government has maintained what the companies pay to it. That tells you that genuineness is lost in the process,” said Minister Ndlovu.
He said industry must be responsible as Government does not want to be heavily involved in the private sector operations as this stifles economic growth.
Minister Ndlovu said instead of introducing price controls Government would rather address factors fuelling price hikes such as the black market currency exchange rates which result in price distortions.
“The economy cannot be run on parallel market rates hence the need to instil discipline in the market place,” he said.
Minister Ndlovu said the interbank exchange rate presents opportunities in terms of competitiveness of local products.
“As we speak our utilities are the cheapest in the region unlike in the past when they were said to be the highest. Our labour costs are the lowest and this has to be addressed. Many other input costs, overhead costs are still lower than those in the region and this ultimately translates to the competitiveness of our products,” he said.
Minister Ndlovu said Government, through its economic blueprint the Transitional Stabilisation Programme, is working to address the monopoly systems in the economy which has seen some industry players unjustly increasing prices.
He said when prices are unjustly increased, Government is blamed by frustrated citizens.
“This economy is run by six or seven companies that are of the view that they can take Government head-on any time.
“We have a company that supplies sugar and they would have a sister company and would like us to believe that they are different, when it fits them.
“They can constrain the supply of sugar and people would revolt against the Government. We have one company that controls the fast moving consumer goods and when it suits them they control the prices and increase them unilaterally and people would take their anger on Government. Under the TSP we are taking decisive measures to address that,” he said.