Editorial Comment: Currency crisis an elephant Ncube should have dealt with

FINANCE minister Mthuli Ncube has played his role of presenting his budget, and clearly, according to his budget statement, government is very much aware that the real time gross settlement balances and the United States dollar are not at par.

Source: Editorial Comment: Currency crisis an elephant Ncube should have dealt with – NewsDay Zimbabwe November 24, 2018

Editorial Comment

This he showed when he announced the move to charge duty in US currency for motor vehicle imports effective yesterday as one of the measures in dealing with the current account deficit.

It boggles the mind, however, that Ncube refers to the US dollar as foreign currency when it is the country’s legal tender. While government is justified to curb vehicle imports as a way of addressing the current account deficit as the second-hand vehicles chew an average of $454,7 million annually, it would appear Ncube is being inconsiderate to the ordinary citizen.

No doubt that Zimbabweans struggle to make ends meet daily, earning an average of a $1 a day in the bond note, which translates to US$0,28. So, being able to import a vehicle is a major achievement and could motivate others to work even harder to benefit the economy.

Indeed, the economic measures put in place point to the right direction, only that there was need for an incremental approach rather than abrupt.

There is no doubt that austerity measures mean that the majority of the citizens must go through some painful stages before the economy begins to stabilise.

But we do not subscribe to the notion that everything that must be done should only be to the benefit of political elites, bureaucrats and their surrogates.

This is why we believe that Ncube was supposed to deal with the elephant in the room –the currency issue. Government should focus on generating enough forex. We are aware that Ncube in September promised to scrap the bond note, introduce the Zimbabwe dollar, adopt the United States dollar or get the country to join the Rand Monetary Union. Yet, his budget statement was devoid of any of those sound proposals he had announced earlier.

One wonders whether, in announcing what he intended to do before end of this year, Ncube had exhibited bad table manners, where someone speaks while chewing some food. We urge the Treasury boss to reflect seriously before making known his intentions.

Perhaps it explains why he failed to conclusively deal with the shortages of foreign currency. He chose the low-hanging fruit — austerity measures and dealing with the budget deficit.

That the budget deficit is expected to end the year at $2,86 billion and $1,56 billion for 2019 is critical, but it does not deal with our foreign currency generation capacity, which is why it was important for him to have a two-pronged approach to this crisis.

It is our hope that Ncube will not find himself in the same precarious position as his predecessor Patrick Chinamasa, who kept on creating artificial money to fund the deficit. Can Ncube be more practical in so far as foreign currency generation is concerned?

We hope that government will this time live within its means for the benefit of the country.

Other countries survive on diaspora remittances, but it is key that they are allowed their democratic right to vote, and this certainly gives them their long stolen rights to choose their leaders. Treasury cannot afford to be side-tracked anymore.

We believe Zimbabwe has all the answers to revive the economy —only that government leaders must look past individualism and selfishness for the country to prosper. True, citizens have different views on the budget, but, of course, there are positives as much as there are negatives.