Monday, September 16, 2019

ZACC should descend on all finance system abusers

Views
News that the Reserve Bank of Zimbabwe (RBZ) has decided to inject more cash into circulation is good for all and sundry. It is also good for industry and the country, given current illicit deals involving cash.
Currently, there is $15 billion in circulation in the country and that is not enough, as confirmed by how dealers are taking advantage and selling cash as a commodity on the market.
We greatly take it that RBZ Governor Dr John Mangudya has realised what we discovered long back, that people are being swindled of their hard earned cash by dealers who are charging up to a 40 percent premium to get cash from plastic money transactions.
In fact, people with plastic money are being sold cash, at extremely high premiums, disenfranchising them of their buying power.
Worse still, most of the shops now have a two-tier pricing regime, having different charges for goods purchased in cash and those purchased with plastic money. Some shops have even designated some goods for cash only and others for both plastic and cash sales. There is no doubt that this is a major cause for inflation and distortion of prices.
How one ends up being sold money is a complex conundrum for the ordinary person. Among the goods sold strictly on cash are the very basic commodities, which the dealers know you cannot do without.
Admittedly the country needs to move away from over-dependence on cash transactions in line with world economic and trade trends, but there are certainly many instances, incidences and services that need to be transacted in cash. We cannot take that away.
The private commuter omnibus sector is a case in point. It is still largely running on cash basis.
While the Reserve Bank of Zimbabwe is moving to curtail cash shortages by releasing more cash into the market, it is a national responsibility for all to deal fairly and avoid abusing the cash.
EcoCash, the host of the main platform outside the use of banking cards, has been abused by many businesspeople and entities and we think Econet Wireless should put in place mechanism to thwart those abusing their facility.
The Zimbabwe Anti-Corruption Commission should also descend on those who abuse the finance system. It is fact not fiction that big retailers, wholesalers, fuel service stations supermarkets, individuals who are fluid with cash and other companies with access to cash are the ones fuelling the selling of cash. Many people dealing with the selling of cash at the high premium are actually sponsored by big companies and this is now common practice.
There is need for a blitz involving ZACC and police.
Yes, the RBZ can increase the circulation and soon we run into the same trap. There is need to come up with punitive measures for those buying and selling cash at a premium.
We know as a matter of monetary policy that cash and plastic money have the same value.
But the unscrupulous among us have abrogated themselves the powers to give different value to plastic money and cash.
We are sure that as a country we should not afford that pricing regime. In fact, we do not need it.
We also know that the current two tier pricing regime has worked against the elderly, the pensioners and most rural communities, among other groups that have been excluded from fully participating in the national economy because of proximity.
Suffice to say, what is happening will lead to a national economic disaster if it is not nipped in the bud, urgently.
For starters it undermines the confidence of the national legal tender that was introduced recently and at the same time promotes illegal dealings. We shudder to think where the two-tier pricing regime can help this country given the 40 percent gap it has created on the pricing regime.
We therefore, call for RBZ to work very closely with ZACC, the police, Econet Wireless, Zimbabwe and all other stakeholders to deal with this problem.