eBusiness Weekly
Taurai Togarepi
Since assuming office President Mnangagwa adopted the Zimbabwe is open for Business Mantra. True to his word, he has been consistent in all forums and backed this by the revision of the controversial Indigenisation Act with only platinum and diamonds retaining the strict ratio of 49/51 ownership between foreign and local partners.
The President alongside the Ministry of Foreign Affairs, the Reserve Bank of Zimbabwe and Ministry of Finance and Economic Development have been to several countries convincing potential foreign investors on the new trajectory the country is taking to revive the economy.
Notwithstanding the positive response, it should be imperative to note that most of these promises are hinged on the outcome of the elections. This therefore, calls for the President and his team to continue on this aggressive re-branding exercise.
In addition, the impending elections should be free and fair and be endorsed by the international community if the country is to get the much needed foreign direct investment.
Of concern, however, are the few notable policies which negate calls by the President that the country is open for business. Is it possible to say the country is open for business when the central bank retains a certain portion of export receipts and uses a priority list to allocate foreign currency?
Ideally, the banking sector should be allowed to allocate foreign currency from one pool where supply and demand determine the price of hard currency. There a lot of distortions in the market emanating from these controls.
For example, some companies get foreign currency using the 1:1 exchange rate between the bond note and the US$ and at the same time some companies get the hard currency from the parallel market where premium rates hover around 40 percent.
There is need to remove the peg and allow the exchange rate to float in line with market forces. This may incentivise individuals and companies to desist from becoming “small banks” were they stash hard currency under their pillows.
Government officials should sing from the same hymn book when it comes to policy matters especially topical issues. The RBZ and the Minister of Finance is on record that the country will introduce a local currency when fundamentals are right including having a reasonable import cover.
The Deputy Minister of Finance recently called on the government to adopt the rand as a way to steer the ship from the current economic problems. This sends conflicting statements to potential investors and the general public.
Lastly, there have been conflicting statements from the Minister of Transport and Minister of Finance concerning the ownership and amount paid for airplanes acquired from Malaysia. How can a minister say conflicting statements over a period of less than a year on the same issue?
This is a serious concern to tax payers especially when the airline industry is struggling and there is no clear road map on how the Government is planning to plug the hole and channel those funds to other deserving cases such as health where cholera is running havoc in the country.
