ZIMBABWE National Chamber of Commerce (ZNCC) Chief Executive Officer Christopher Mugaga has removed the gloves on government, singling out Vice president Constantino Chiwenga, for stifling growth by having “an excessive hand” in the running of the economy.
“Government hand is just too much. There is no economy which has grown without room for enterprise. The government hand is just everywhere,” Mugaga said.
“The tombstones because of price controls in this country, you can write a book. (Secondly), negotiations, you don’t bring politicians, you don’t need to bring an RBZ governor into a court to determine the salaries of teachers…You don’t call a vice president to come and meet on issues of the economy.”
Turning to the price distortions existing in the market, Mugaga said government needed to face the hard truths and allow market forces to prevail.
He insisted that the choice of re-dollarisation was not the preserve of government insisting that by “first half of the year 60 percent of the economy will be dollarised. That’s where we are going.”
The debate should be to what extent we can sustain it, he said.
“As private sector it’s high time we are open when we meet our minister and president to say ‘things are not well. You can’t run an economy this way. Because for you to bury your head in the sand and say you want to continue to sell fuel at $1.41, I tell you it’s impossible. That cascade you bought it for $2, 50 but you want to continue selling a litre of fuel at $1,41, those distortions are not sustainable,” he said.
He also slammed the setting up of a various committees by government, the latest being the a nine-member foreign currency allocation committee with representation from various ministries
“Liberalise, you can’t control what you don’t have,” Mugaga charged. “That’s the government hand we are talking about.”
“….Foreign currency allocation committee, when I looked at the composition, the problem was having the committee in the first place because it’s not necessary but then when you have it you set bureaucrats in that all of them are from government. Are you saying we couldn’t trust the RBZ to allocate forex alone? That we needed this minister and that minister to see what was happening. What signal are you sending into the market?” he queried.
“The committees are just getting too much. After this forex committee, the next thing you have subcommittees one for fuel another for health it’s too much. Government hand is too much.”
Mugaga said the economy has been hurtling towards catastrophe since October 1 when government separated Real Time Gross Settlement (RTGS) balances from Foreign Currency Accounts (FCA).
This was interpreted by the market as the devaluation of RTGS bank balances further pushing up prices of goods sold through electronic transactions and bond notes.
“Some of our major challenges today date back to October 1 when treasury boss (Finance minister) Mthuli (Ncube) just said we will separate RTGS balances from FCA account. That was confirmation. That was the day we realized something is wrong with the RTGS balances and in the process everyone started reacting. It was very wrong and quite disastrous and we are paying the price like it or hate we are re-dollarising,” Mugaga said.
This rare direct attack on the presidium is a sign that the situation has reached alarming levels.