THE business sector took Reserve Bank of Zimbabwe officials to task this week over a recent Monetary Policy Statement and the move to separate nostro foreign currency and Real Time Gross Settlement accounts.
At a meeting held by the Institute of People Management of Zimbabwe (IPMZ) and the Employers’ Confederation of Zimbabwe (Emcoz) last week, representatives of various companies told RBZ deputy director Nebson Mupunga that they had warned the central bank against introducing bond notes because of the disparity currently obtaining on the parallel market.
“People did say quite categorically it was not right to mix the bond notes and the greenback but the RBZ insisted that it was going ahead. The problems we are now facing are exactly why we were against the introduction of the bond note,” one of the participants pointed out at the meeting.
Business quizzed Mupunga if the decision to separate forex from RTGS balances was not an admission by the central bank that the bond note is not at par with the US dollar. The central bank has maintained that the fiat currency is trading at par with the United States dollar despite its rapid loss of value on the alternative market to the greenback.
Mupunga however said the introduction of bond notes had in fact increased exports and ensured “transactional efficiency”. He said the fiscal deficit is the major challenge the economy is facing rather than the bond notes.
Participants at the meeting scoffed at Mupunga’s claim during his presentation that the economy is on a growth trajectory given the deepening economic crisis which has resulted in the shortage and skyrocketing of prices of goods and services.
“You are saying the economy is on the rebound. Are you saying the deficit we have and the shortage of fuel is growth? I have done economics and I do not know your interpretation of growth. I am even more confused by your explanation,” one participant said, to the applause of the audience.
However, Mupunga pointed out that the benchmarks they use to compute growth are recognised internationally adding that the International Monetary Fund has validated its growth statistics.
Emcoz first vice-president Israel Murefu pointed out that the 2% tax introduced by Finance minister Mthuli Ncube at the beginning of the month on electronic transfers is further punishment on businesses, which are already paying a number of other taxes including corporate tax.
“It would appear that government want the citizenry to tighten their belts but we have not seen similar behaviour by government,” Murefu said.
Emcoz second vice-president Demos Mbauya said the 2% tax has increased the cost of business as they look to make up their value chains.
Mupunga said the 2% tax is a “better devil” than government borrowing from the central bank because that would only increase inflation which could then lead to inflation which he called “a big tax” which erodes the value of depositors’ savings.
Participants at the meeting were angered by the failure of the Finance ministry to send representatives to the meeting to discuss the 2% tax.
“The Ministry of Finance has not shown up. Do they want us to write letters or visit them individually? It is disrespectful on their part,” one of the participants said.