Vice President Constantino Chiwenga has issued a firm warning to local businesses who engage in parallel market activities describing them as financial terrorists and vowed that the government will unleash harsh punishments.
The same warning was issued to local businesses that externalised foreign currency who did not heed a call by President Emmerson Mnangagwa to return the funds.
This comes after a wave of price increases for most basic commodities, with most local businesses blaming the situation on the economy.
Addressing business delegates at the 13th edition of the International Business Conference, hosted by the Zimbabwe International Trade Fair in Bulawayo on Wednesday, Vice President Chiwenga said most local businesses were manipulating the economy to suit their own needs.
“We would want to make this warning today; those who are doing this exercise will already know you. If one tries to fight and practice financial terrorism in Zimbabwe we will react appropriately and no should cry that he has not been treated fairly,” said the VP.
He claimed that government was committed to fixing the economy but its ‘noble efforts’ were being dented by individuals and corporates who continue to sustain the parallel market in competition with the formal market by engaging in underground activities.
“On the monetary policy front, the establishment of an Interbank Bank Foreign Currency Market in February 2019 discarded the fixed 1:1 exchange rate peg between the US$ and the bond note in favour of a market-determined rate.
“The absence of a formal market for foreign exchange was causing distortions and the misallocation of resources in the economy. The market-based framework for the determination of the exchange rate is expected to facilitate financial sector stability contain inflationary pressures and build public confidence,” he said.
Chiwenga implied it was unfair for the government to honour the demands of business only to be derailed by saboteurs.
“Last year you (businesspeople) wrote to me in November wanting the Interbank and in December we met the business sector at Rainbow Towers together with the Finance Minister and we asked you why you ambushed us even though we came and explained.
“We were quick to accept (the idea) and it is what you were granted with but that effort has gone upside down. There are those who want to make sure it will not work but it will work, it is you (the saboteur) who will not work,” he said.
Turning to externalisers who stand accused of taking large amounts of money outside the country, the former army strongman said the government was ready to come down heavily on those who continue to ignore the call.
The vice president added that the government is committed to implementing austerity measures in order to restore macroeconomic stability.
“Government is implementing critical structural reforms necessary for economic turnaround and take off. Some off the reforms will no doubt be painful but are unavoidable because, without them, our economic fortunes can only become worse,” he said.
“Successful turnaround to improve the living standards of our people requires that we remove existing market distortions which undermine consumer welfare through rampant arbitrage. Our propensity to make super profits quickly should give the watch to hard work discipline patience and endurance. These are the values which will make the middle-income economy by 2030 which we all cherish a reality.”
