Non-governmental organizations coordinated by NANGO, met to discuss the Monetary Policy Statement and its implications on civil society, formal and informal sector and citizens. With an appreciation of Reserve Bank Governor, Dr. John Mangudya’s intentions to stabilize the economy, create a conducive environment for both local and international investment, protect free funds and ensure that formal businesses can access foreign currency, NGOs noted that the statement comes short of addressing all the needs of the informal business sector, civil society and ordinary citizens. We, therefore, share the following concerns and recommendations;
The monetary policy is exclusionary; it is designed in such away that only responds to needs of the formal sector and disregards needs of the informal sector yet it caters for the majority of the economy.
The rate that was stipulated by the Reserve Bank Governor is too low when compared to the parallel market, this gives opportunity to arbitrage where those with access can buy from the banking sector and sell in the black market. It also does not attract sellers.
The Monitory Policy Statement does not guarantee access to Forex by the informal sector.
Civil society is curious to know measures that will be taken when businesses do not comply with pricing in RTGS Dollars and continue charging in US$.
NGOs want to know what effect conversion of the Bond Note to the RTGS Dollar has on the US$200 million that was secured from the African Export Import Bank to back the surrogate currency.
Civil society is concerned that the monetary policy was produced without consultation of interested stakeholders and ordinary citizens.
The Reserve Bank Governor should rebuild trust and confidence of citizens in the Zimbabwean currency. Policy coherence and rule of law should be emulated by the government as these are also a threat to stability of the economy.
The Reserve Bank Governor should engage NGOs directly and guarantee that free funds are ring-fenced. There is need for a proper legal framework to ensure free funds are ring-fenced.
The 30 day period before liquidation of Forex should be abolished because it doesn’t build confidence in the banking system and doesn’t give business the opportunity to use their discretion on how to save money.
The government should address erosion of savings denominated in United States Dollars (US$) especially for savings that were done before the introduction of the Bond Note.
The same access to foreign currency should be extended to the informal sector which is currently the largest sector contributing to the economy.
RBZ should put in place mechanisms for engagement with all relevant stakeholders as this enhances credibility and acceptability of the policy by all actors.
Source: National Association of Non Governmental Organisations (NANGO)