Call for Action


CEO Africa Roundtable is a membership based platform which brings together CEOs and Senior Executives from both public and private sector to champion economic development in Zimbabwe and across Africa. The year 2018 saw the President leading the country in the mantra “Zimbabwe is open for business” – an imperceptible and definite acknowledgement that Zimbabwe as country, needs the brotherhood and support of other nations to achieve economic prosperity.

The developments over the last few weeks are a testimony to a rocky economic environment and there is a legitimate expectation amongst our members to engage and be part of the solution to our national challenges in support of the Vision by the President.


Zimbabwe has twin problems which are trade imbalances (trade deficits) and fiscal imbalances (budget deficits). Shortage of FOREX and cash are not the problem but simply symptoms of the underlying and unsustainable deficits and imbalances over decades. The fact that by our own admission we have broken our own laws through borrowing way beyond legally approved limits should be a wakeup call to us as a country in general and specifically to the Monetary and Fiscal Authorities. The insistence on an exchange rate of 1:1 and hence resistance to allow a market determined exchange rate between the RTGS rate and the USD has precipitated an effervescence in the economy which if not attended to will seriously dislocate the pillars on which our economy rests. This will accelerate de-industrialisation.

Olivine Industries, which manufactures cooking oil has closed its doors as it is unable to access the FOREX it needs. More than being just an eyesore, the fuel ques are a clear sign of a labour force which is becoming more and more unproductive as key brains are spending valuable time looking for fuel. Delta Corporation had opted to sell its products in FOREX so as to be able to import its raw materials on its own without taking a begging bowel to Government. This move was resisted yet this would free up government need to spoon feed industry.

Clearly, FOREX generation is NOT the problem. We contend that at close to $6 billion in exports, Zimbabwe has enough FOREX, in fact as a country of 16 million people we are punching way above our weight! Kenya a country of 47 million is exporting similar amounts. Zimbabwe therefore, per capita is exporting about 3 times more than Kenya. So we submit that we have enough FOREX in the country however it is how we are managing or mismanaging our foreign exchange system that we should address.

It must be said that the relationship between money supply and budgeting is also causing untold difficulties for Zimbabweans. As a country we have tended to grow money supply with near reckless abandon. This lack of fiscal discipline has put phenomenal inflationary pressure on the demand for goods and services. Our attempt and predictable failure to suppress the movement of the exchange ra te to reflect inflation differentials is tantamount to creating embarrassing arbitrage opportunities by privileged authorities in the forex allocation chain of command at the expense of the companies who are generating the currency.

This in the end is incredibly inflationary as we witnessed in the run up to dollarization in 2007/2008.

In 2008 / 2009, the last time this happened, the Government of the day, did put a dramatic end to the insanity through dollarization and the government went on to compliment this through curtailing government expenditure through “eat what you kill.” It is really regrettable and somewhat embarrassing for us as Zimbabweans to be seeing the same symptoms of 2008/2009 rearing their ugly and smelly heads. This has instantly triggered a raging debate throughout the national on whether we should take the same medicine we took in 2009 and again “dollarize.”

Clearly the country is divided in various platforms with emotions reigning high as the injured population recollects the nightmares o f the bearer cheques and the wiping off of their life-long savings back in 2009. As hard as it may be, it is important that as a country we make a collective decision on which path to take on this matter. Continued indecisiveness on the currency and exchange rate question will plunge the country into serious financial disintermediation, escalation in prices and uncertainty which undermines investment for long term growth. Already the distortions have led to serious labour unrest. More worrying are factories which are limping and have started closing and we risk losing capital to other countries. The Olivine example sighted above is an indictment. Olivine and others who will surely follow should be saved. The closure of one company is one too many in a season where we are rallying around the mantra of “Zimbabwe being open for business.”

Zimbabwe should not be a leaking bowel where on one hand we are scuppering for investment which at the same breath we are losing the investments we already have. The authorities insistence for a 1:1 exchange rate is hurting the country in very serious ways and needs to be reviewed and be replaced with a managed floating exchange rate.

The 2009 decision successfully halted and killed inflation. However a whole generation of pensioners lost savings and are now leaving like paupers as a result of a decision that was made on their behalf without their input. There is an unconcluded dispute of how wealth of millions might now be locked up in balance sheets of Insurance Companies who may have profited at the expense of pensioners. In similar fashion in 2016 there was again a unilateral declaration to bring in bond notes. There was neither sufficient debate nor consultation on the matter. The far reaching pain, or at least a part of it, we are experiencing now can no doubt be traced once again to this unilateral decision.

Yes the government has done well in containing the budget deficit of late but t his may not be enough. The country has the responsibility to address the tricky question of currency options in an inclusive manner. The question goes beyond the name of the currency but also foreign exchange management and financial market prices. This is not an easy undertaking but it cannot be postponed any longer, otherwise the implications on the economy may be too grievous.

Way forward

The country is at a juncture where a national consensus is required. Of critical importance is the need to regain all lost trust, confidence and certainty. It is against this back ground that As CEO Africa Roundtable, we call upon the Government to do the following without any further delay:

  1. Pursue a managed floating exchange rate and do away with the 1:1 fixed exchange rate. This move will provide the market with a legal way of obtaining FOREX through formal banking channels whilst also decriminalising forex trading. Zimbabwe needs this.
  2. Do away with the FOREX allocation system and thus allow the market to allocate forex.
  3. Declare the RTGS balances a local currency and monetise it. Take out bond notes from the market and contain money supply growth.
  4. Stick to and respect section 7 (2) of the Reserve Bank Act of Zimbabwe [ Chapter 22:15] with respect to Government borrowing not exceeding twenty percentum of the previous year’s revenue.

CEO Africa Roundtable shall be engaging the relevant authorities including parliament to seek a speedy resolve of these matters before irreparable damage is done to the productive side of the economy.

By Order of the Board
Kipson Gundani
Chief Executive
CEO Africa Roundtable

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