Confederation of Zimbabwe Industries (CZI) says Zimbabwean authorities should correct policies for efficacy rather than arrest business leaders for destabilizing the economy.
Reserve Bank of Zimbabwe has been targeting businesses for using the parallel market rates in pricing products.
The Zimbabwean Central Bank has already put the Simbisa brand under investigation for using parallel market rates.
But the CZI president Kurai Matsheza says the arrests will cause unnecessary panic in the market and erode consumer confidence in government policies.
“The arrest of business leaders will only serve to destabilize the relationship between businesses and authorities as the two need to work together to reindustrialize the economy in pursuit of Vision 2030,” Matsheza says.
“Fear will drive business decision making as has happened with the 2007 arrests with resultant shortages, as companies could not find any other ways of funding their forex requirements legitimately.”
CZI expects policy correction measures and business measures to correct the situation that has seen the Zimbabwean local RTGS currency losing value, sending authorities into a panic mode.
The organization’s president says bad policy blurs the lines and results in criminal activity co-mingling with legitimate business survival decisions in the forex misprices system.
“Essentially, at the center of this is policy correction, when policies fail we should not arrest people, we should correct the policies for efficacy,” Matsheza says.
Matsheza also says a heavy-handed approach to a problem that has its cause squarely in sub-optimal policy implementation creating arbitrage opportunities would be unsettling to the markets.
Zimbabwean authorities have been targeting illegal money changers and threatening to arrest businesses with economists predicting the fall of the Bond note.
RBZ and the Ministry of Finance have already met with the business leaders with fears of instability in the country’s economy.
The Central Bank has also been arresting money changers with the gap between the official rate of US$1: 87 ZWL and the parallel market at US$1:$190 ZWL widening.
Prices have also recently shot up including in government parastatals like ZUPCO, raising the Total Consumption Poverty Line(TCPL) for one person to $6,654.00 in September 2021 from $6,350.29 in August.
CZI also urges authorities to ensure that Zimbabwe’s Auction System is managed as it is supposed to be.
“As CZI we reiterate that a true Dutch auction would perform the function of price discovery and pave way for a more liberal exchange rate regime,” says Matsheza.
Zimbabwean businesses have been complaining following a backlog in the allotment of funds from the auction system.
