The authorities should fine-tune the weekly auctions run by the Reserve Bank of Zimbabwe (RBZ) as part of broader efforts to contain exchange rate volatility seen in recent months in the parallel market, chiefs said. business.
They also believe that measures to ensure price stability and the availability of foreign exchange would be key to the growth of industry and business this year.
The foreign currency auction system, which was introduced on June 23, 2020, has succeeded in containing rising inflation, stabilizing prices and improving access to foreign currency.
The resulting economic growth is expected to push economic growth to 7.8% in 2021.
However, delays in settling successful bids negatively impacted companies’ cash flow and shook market confidence.
Zimbabwe Confederation of Industries (CZI) President Kurai Matsheza expressed hope that the government will step up efforts to ensure the proper functioning of the auction system.
He said it would close loopholes exploited by profiteering companies and traders through currency manipulation.
“(Success in) 2022 hinges on a number of fundamentals: first, the price and availability of foreign currency; As long as this remains a problem, it will continue to drag down the performance of the industry. We know that we had this problem last year and even before, but we hope that the authorities will be able to better manage this in 2022, ”said Matsheza.
“As an industry, we’ve had meetings with the authorities, we’ve had recommendations on what we think are likely solutions around this.”
Zimbabwe National Chamber of Commerce (ZNCC) Director General Christopher Mugaga said policy interventions were needed to reduce exchange rate volatility as the situation could potentially escalate.
“We need to keep fine-tuning the auction system; this is good, we should promote it, but we think there is a leeway or a margin to allow us to reach the optimal level of auction management, because with what the black market rate is doing, we can’t afford to stick our heads in the sand and say we don’t care about black market rates, ”he said.
“We must therefore rally to monetary development to ensure that we eventually have an acceptable exchange rate determination program. In other words, we need to put in place structures to determine the price of the Zimbabwe dollar in the (formal) market. This is what we need to work on. “
Business leaders said the by-elections for vacant seats in the National Assembly and the 2023 harmonized elections are unlikely to disrupt business and the economy.
Mr. Christophe Mugaga
Mr Mugaga said: “We pray that the by-elections in approximately 27 constituencies in March of this year and into 2023 do not disrupt the progress we have made as a nation in 2021.
“In Zimbabwe elections are sometimes divisive; as a company we want there to be a common starting point because the pie we want to grow is the economy. “
Likewise, Matsheza said he hoped political temperatures “will not be raised to levels that will disrupt business.”
“We urge the political parties themselves to ensure that whatever they do (campaigns) the environment remains good for business and for everyone.”
CZI also believes agriculture will be at the heart of the economy this year.
“The performance of agriculture will be at the heart of the year, because you know that the rains started late and we fear that they will be short and that the production will not be as good as in 2021”, a- he declared.
“We applaud the government for its efforts in building dams in some areas; Hopefully if there is to be good rains, irrigated crops can be maintained. “
Experts say continued investment in dams would likely help transition rain-fed agriculture, especially at a time when the world grapples with climate change.