Implications of Monetary Policy on access to medication

DUDZAI MUREYI

Earlier this week, a pair of men – the Reserve Bank Governor and the Finance minister, delivered the Mid-Term Monetary Policy Statement and a set of Fiscal measures for reversing fiscal disequilibrium, respectively. Zimbabwean social media responded, tongue-incheek, retorting that a different pair of men; Strive Masiyiwa, Chairman of the Econet Group, the telecoms company which EcoCash is a mobile money subsidiary of and Mukoma Tino of Roadport, a fictitious illegal forex trader, are the legitimate custodians of the mandate to deliver the mid-term monetary policy and fiscal measures under our current circumstances. These social media jocular posts are laden with the obvious implication: Driving monetary policy in Zimbabwe is no longer the exclusive privilege of the occupants of the central bank tower offices. Yet, sneezes from the Tower, still cause multiple sectors to catch colds- health included.

For anyone interested in access to medicines, the biggest pieces of news to come out of Monday’s policy statements were:

· The amount spent on medicine importation between January and July this year,

· The 3900% increase in Intermediated Money Transfer Tax on all electronic (including mobile money) transactions, effective October 1 and

· The surreptitious formalisation of the provision that allows traders to essentially trade using two different pricing regimes; one price quoted in US dollar and another which quotes the bond note rate. Indeed, there is now a provision for the maintenance of two bank accounts (one for foreign currency and another for local money); the 1:1 gedye gedye pretence is over.

In his monetary policy, the RBZ governor presented a snapshot summary of what we used foreign currency for in the last six months. Medicines constituted 1% of the total forex expenditure at $40 666 809, beaten only by diesel, petrol, electricity, crude soya bean oil, maize, rice and wheat. The question of whether this was enough money to have spent on medicines is better answered by the patient who has learnt that his life-saving medicine, is nowhere to be found on pharmacy shelves. To hear them speak, pharmaceutical wholesalers allege that their forex payment requests are not being prioritised by the central bank. Fuel, grains and other commodities take precedence, as the governor himself alluded to in his statement. The central bank’s position is indeed a difficult one. Allocative efficiency decisions are incredibly difficult when everything is essential but the purse is small.

Enter the Finance minister, who announced that for every dollar we transact electronically, 2 cents of ours will scurry off to the national coffers. In a country where 95% of all retail transactions are electronic, this is doubtless an effective revenue collection intervention for the collector but brutal for the remitter. Because this tax is non-discriminatory, and includes mobile money transactions, it will pinch the already poor households the most. Their ability to access medicines without incurring catastrophic health expenditure is further compromised.

The clandestine but official acknowledgement, that the value of the bond note and that of the US Dollar are not at par, (which we have seen dressed as the announcement that two separate bank accounts – a Nostro FCA for foreign currency proper, and an RTGS FCA for bond note money, can now be maintained by the same person or entity), has major ramifications for the access to medicines. To raise foreign currency to enable them to fund the Nostro Foreign Currency Accounts that are now allowable since the delivery of the policy statement on Monday, pharmaceutical retailers and wholesalers may start to trade in foreign currency only, at least for some products with potentially high profit (or loss) margins. Accessing RBZ forex using the bond note balances in their current RTGS accounts has not proved efficient- providing enough incentive for them to pursue this method of raising forex to pay for medicine imports.

The patients that can afford to pay for their medicines in hard currency are not exempt from the woes of interrupted access to medicines as long as pharmaceutical wholesalers and retailers face hurdles in re-stocking or are nervous about selling and hold on to merchandise, creating artificial shortages. A theoretical alternative for this privileged demographic would be to purchase their own medicines outside Zimbabwe, notwithstanding the high transaction costs involved. In fact, at the time of writing, a certain South African entity has taken it upon itself to be the supplier and doorstep deliverer of medicines to individual Zimbabwean patients that can afford forex payments. For legal reasons, I am however unable to publish the details of this entity in this article. For anyone able to navigate the labyrinth that is medicine regulation in Zimbabwe, this is a viable
a business to explore for those legally qualified.

It is going to be a long night; develop deep meaningful relationships with your pharmacist, he/she may be more inclined to go an extra mile to ensure your supply of medicines is uninterrupted during the very dry months. He/she might know which colleague to ask on your behalf when few outlets have your medication in stock. He/she may even reserve supplies for you or be inclined to offer less punishing payment terms for you. It really could make all the difference.

Dudzai Mureyi is a pharmacist skilled in health policy analysis, currently pursuing doctoral studies in Global Health. Find her on Twitter: @BonnieDudzai or email her at: dudzai8787@gmail.com.

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