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Government Fails To Enforce RTGS Prices

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The Zimbabwean government has failed to implement Statutory Instrument 127 of 2021 which enforces RTGS pricing.Government reneged from its initial plan to enforce all business players to display prices in both local and foreign currency,
under the recently promulgamated statutory Instrument 127 of 2021.

The act clearly demands that SI 2021-127 Presidential Powers (Temporary Measures) (Financial Laws Amendment) Regulations, 2021
HIS Excellency the President, in terms of section 2 of the Presidential Powers (Temporary Measures) Act [Chapter 10:20], hereby makes the following regulations:—
PART I
Preliminary
Title
1. These regulations may be cited as the Presidential Powers (Temporary Measures) (Financial Laws Amendment) Regulations, 2021.
PART II
EXCHANGE CONTROL ACT [CHAPTER 22:05]
Amendment of section 5 of Cap. 22:05
2. The Exchange Control Act [Chapter 22:05] (“the principal Act”) is amended in section 5 (“Offences and penalties”) by the repeal of subsection (4e) and the substitution of—”

However this move as most anaylsts had initially hinted was impossible to implement considering that the country is not producing much and also importing all its fuel in forex, making it impossible to trade it using the RTGS currency on the formal market.

Fuel challenges have continued to dog the government forcing all players to sell the commodity using the green back , much to the pains of the general population.

Clearly Finance Minister Professor Mthuli Ncube and Reserve Bank of Zimbabwe Governor Dr JP Mangudya have led in governments break with this currency policy.

Finance and Economic Development Minister Professor Ncube together with the apex bank boss, Reserve Bank of Zimbabwe (RBZ) Governor Dr.John Panonetsa Mangudya have been accused for abandoning their own currency policy.

It appears the two finance economic and banking technocrats are undermining their own currency as they struggle with inflation.

The RBZ Governor and Finance Minister, have since reintroducing the Zimbabwe dollar in 2019, insisted that as much of the country’s business as possible must be carried out in the local currency.

That, they said, was necessary to break the yoke that use of the U.S. currency had over the economy since the Zimbabwe dollar was suspended in 2009. As the value of neighbors’ currencies declined, the country’s industry became uncompetitive and the economy collapsed.

But in what economists say seems to be a case of admitting that the local unit has failed to win acceptance, the two men have announced that government workers will receive annual bonuses this month in U.S. dollars for the first time since 2018.

The measure, which will see the cash-strapped government pay out $90 million, is due to rising prices and demands from labor unions, they said.

While a precursor to the reintroduced Zimbabwe dollar traded at parity with the greenback in February 2019, you need 105 of the units to get a U.S. dollar now. On the black market that rate is 175. That’s slashed the earnings of civil servants in real terms and fueled inflation, currently at 55%.

“A precedent has been set,” said the Editor of this publication in his own opinion.

Government’s newly gazetted Statutory Instrument 127 of 2021,which mainly seeks to instill discipline in the foreign exchange market, by imposing fines on individuals and businesses who fail to adhere to government’s policy on foreign exchange, has been met with mixed reactions from the public.

ross moyo

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