Govt policy inconsistency rattles business

October 8, 2021

LIVINGSTONE MARUFU

Local companies have  raised concerns over the government’s policy inconsistency saying it could cripple the economy as it is pushing away foreign direct investment.

Executives said the absence of policy consistency means there is no guarantee that investments are safe.

“.… We have been witnessing policy inconsistencies and discord between  various government departments but going forward  there is need to improve on policy consistency to grow the economy and attract investors,” the Zimbabwe National Chamber of Commerce chief executive officer Christopher Mugaga (pictured) told Business Times.

In a statement accompanying the group’s financial results for the year ended June 3.

Innscor board chairman Addington Chinake said policy consistency hold key for the recovery of the economy.

“Further gains can only be made by the country through policy consistency, the removal of the remaining distortionary and arbitrage effects, and through the implementation of clear and non-conflicting laws and regulations,”  Chinake said in a statement accompanying the conglomerate’s financial results for the year to June 30,2021, published last week.

Zimbabwe’s largest brewer, Delta Corporation, said the “board is concerned about the unstable operating environment as indicated by hyperinflation, frequent changes to the policy environment, a weak local currency and the existence of multiple and disparate exchange rates”.

Zimbabwe is struggling to extricate itself from economic woes and requires much foreign direct investment, to repair the damage.

But, several potential investors are shying away from the country partly due to the  policy inconsistencies.

Analysts told Business Times that the government should needs to make drastic reforms, including dumping economic policies that are unpalatable to foreign investors, which will put business on the road to recovery.

Miners said  the government needs to be consistent on  policies to attract investors.

“There is a need for policy consistency in the economy,” the Chambers of Mines of Zimbabwe chief executive officer Isaac Kwesu said.

The government, for example, outlawed the use of multi-currency regime in June last year in favour of the Zimbabwe dollar through Statutory Instrument (SI) 142 of 2019.

But, later reversed the policy.

Recently, the Reserve Bank of Zimbabwe  enacted SI 185 of 2020 which efectively liberalised US dollar sales of goods for some sectors on condition of dual pricing with conversion at the ruling exchange rate.

But, the government later changed the  policy, passing Statutory Instrument 127 of 2021 which prohibited businesses from selling goods and services or quoting at an exchange rate above the ruling auction market rate.

 

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