Govt must repackage indigenisation policy: Mashakada

Source: Govt must repackage indigenisation policy: Mashakada – The Standard July 31, 2016

A former Cabinet minister has urged government to repackage the indigenisation policy to boost investors’ confidence.

BY TARISAI MANDIZHA

In his presentation in the National Assembly on a motion on cash shortages, former Economic Planning minister Tapiwa Mashakada said money markets operated on the basis of confidence.

“The confidence crisis, let us repackage our Indigenisation and Economic Empowerment Policy so that we get, not only foreign direct investment [FDI] but domestic investment as well into the country so that we can grow this cake,” the former minister said last week.

“We have got the natural resources and everything but what we lack is capital to make sure that there is growth in the country through manufacturing and production.

“Without money, there is nothing we can do.”

Mashakada said the cash crisis was a result of lack of investor confidence emanating from policy ambiguity and inconsistency, debt service, budget deficit and continued borrowing, illicit financial outflows, trade deficit and weakening of the rand and depletion of the nostro accounts.

He said the sluggish growth in the economy; low national savings, low-usage of plastic money and liberalisation of the capital account had also fuelled the cash crisis.

The economy has been experiencing cash shortages since the beginning of the year, resulting in banks placing caps on withdrawals as they try to manage the available cash.

The central bank and banks have responded to the crisis by reducing bank charges to promote the use of plastic money and thereby reduce the demand for cash.

The central bank has also announced the intention to introduce bond notes through a 5% export incentive facility.

The $200 million facility would be guaranteed by the African Export-Import Bank.

Mashakada said the cash shortages had resulted in the emergence of a parallel market where people were being charged more to get cash.

“There are now [cash] barons who are emerging and charging parallel market rates to give cash,” he said.

“If you go to the parallel market wanting cash, say $1 000 – you are given that $1 000 cash and you have to make a RTGS [Real Time Gross Settlement] to the bank account of the supplier on a premium of about 10% to 25%.”

COMMENTS

WORDPRESS: 4
  • comment-avatar
    C Frizell 6 years ago

    True, just about all the problems can be traced back to one single word – CORRUPTION

    But Zanu cannot stop corruption and still survive. Stop corruption and Zanu dies. It is as simple as that.

  • comment-avatar
    njalo 6 years ago

    Now here is a good statement.
    Become good farmers first.
    When you have become good farmers, you will improve the gross domestic product and perhaps have some profits to reinvest back into the national economy. Your choices of investment will be determined by the needs of the nation or even your own needs…………like a good repair or maintenance service for your irrigation equipment, tractors, harvesters etc, etc. So you will invest into a different sector of business and collectively, with other successful farmers, you will have several well run businesses……….AND THAT”S WHAT A GROWING ECONOMY MEANS.That is how the white settlers did it.
    Anything else means FAILURE.
    Now you know why Zimbabwe is a failure.

  • comment-avatar
    Ray stevenson formerly of bulawayo 6 years ago

    Proper western style (multi party democracy)must be implimented before the country stands any chance of iliminating corruption this means that mugabe the police ; army; airforce;&cio leaders all have to be removed.the answer is easy.=black people must follow up their pre independance demand of ONE MAN ONE VOTE only this time with the inclusion of western and any other observers so its seem to be free and fair .only the guilty will be scared.

  • comment-avatar
    Tiger Shona 6 years ago

    Get rid of it immediately. It is only a license to steal.