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President Mnangagwa has blamed the recent local currency devaluation on businesses taking advantage of cheap foreign currency and sabotaging the government’s reputation in the run up to elections.
President Mnangagwa has blamed recent local currency devaluation on businesses taking advantage of cheap foreign currency and sabotaging the government’s reputation in the run up to the elections.
In his weekly column in The Sunday Mail, published on 21 May, Mnangagwa alleged that businesses were accessing US dollars from the central bank at concessionary prices, while disconnecting point-of-sale units to discourage sales in local currency.
“We even wonder if at all we are dealing with business anymore, or with politicians disguised as company executives, seeking a political upset,†Mnangagwa said.
It is a narrative that the president has perpetuated for some time. At the Zimbabwe International Trade Fair in April last year, Mnangagwa said: “Business cannot purport to support government by day and sabotage it by night and thereafter play victim.â€
In May that year, Mnangagwa addressed Zanu PF party youths in Harare: “We are aware that there are people working with detractors to bring about regime change through the manipulation of our exchange rate and unjustified price hikes.
“My government is seized with this matter and perpetrators will soon be brought to book.â€
Stemming losses
“But it is no longer viable to sell goods in Zimbabwean dollars, which continuously loses value every day,†says Gregory Shumba, a shop owner based in Harare. Indeed, the rapid devaluation of the local currency has forced business to snub local currency in favour of the US dollar to limit losses.
“The government has failed to solve the currency crisis since it introduced the multi-currency system in 2019. Local currency is now useless,†he says.
For Anglistone Sibanda, CEO at Green Afrique Technologies, while Mnangagwa’s government has failed to tame inflation, businesses are also taking advantage of government’s lackadaisical approach to policy implementation to profiteer.
“The crisis was created by government and now the fiscal authorities need to now come up with a working formula,†says Sibanda.
“The solution to Zimbabwe’s currency crisis is political. It needs all stakeholders to sit down, de-escalate political tensions ahead of elections and find ways to stabilise the economy,†he says.
As economist Prosper Chitambara says: “We cannot discount other unscrupulous businesspeople that are taking advantage of the situation to profiteer, but there is unsustainable liquidity and broad money supply.
“There is need to address the root cause of money supply. The issue of dialogue and social contract becomes even more important in this kind of situation where there is this conflict between the government and business.â€
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