‘We need tight fiscal, monetary policies’

October 14, 2021

 

PHILLIMON MHLANGA

 

The government should tighten the fiscal and monetary policies and revamp the Dutch foreign currency auction system, a move which will ensure it moves away from being a ‘rationing’ system, the CEO Africa Roundtable has said.

Apart from defining a positive economic trajectory, the tightening of policies—fiscal and monetary—would help forex inflows in the form of foreign direct investment.

Failure to do that, the CEO Africa Roundtable chairman, Oswell Binha warned, the road to price stability would be long.

“(Yes), the annual inflation rate is headed south, (but) is it time to celebrate? Binha asked.

He added: “Unambiguously yes, it is a significant and defining milestone. But just yet, let’s keep in mind that the road to price stability is long and the climb going forward is no less steep, likely more difficult. The key is for authorities to stay on course, further tighten fiscal and monetary policy, revamp the foreign currency auction to ensure it is a truly Dutch Auction and not foreign currency auction rationing system.”

Zimbabwe’s annual inflation hit 837% in July last year but went down to 50.24% in August. However, the inflation rate surged to 51.55% in September as prices of goods and services continue to rise.

Binha spoke at a time when preparations for the CEO Africa Roundtable annual conference have gathered pace.

The conference is slated for October 27 to 29 in Victoria Falls.

Binha said the fiscal, monetary policies and the exchange rate crisis will be deliberated at the Victoria Falls conference.

“Will authorities stay the course, time will tell.  To deliberate on this monetary phenomenon informing this development towards macroeconomic stability, the apex bank governor, (John Mangudya ) will also address delegates, investors and the international community at the CEOs Roundtable on Zimbabwe’s Economic Resurgence in line with our theme, ‘Charting the recovery curve, building momentum, crashing barriers, creating impact’. These issues will be deliberated in line with aspirations of attaining a prosperous upper-middle-income economy by 2030 and realising NDS1 economic goals.”

Apart from Mangudya, Industry and Commerce Minister, Sekai Nzenza,  the commissioner for Economic Development, Trade, Industry and Mining at the Africa Union Commission, Albert Muchanga, UNIDO South Africa representative, El Mekwad Khaled and Sibongile Sambo, the founder and managing director of SRS Aviation,  and Speaker of the National Assembly, Jacob Mudenda, are some of the high-powered speakers expected at the conference.

President Emmerson Mnangagwa is expected to officially open the conference as well as presenting the CEO Roundtable Awards.

 

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