By Maxwel Teedzai- In a recent telephone interview with NMWUZ – National Mine Workers Union of Zimbabwe President Kurebwa Javangwe Nomboka, the Government of Zimbabwe has been urged to review it’s ‘reckless ambition’ in light of the Second Republic’s NDS1 – National Development Strategy 1 (January 2021- December 2025), which Nomboka said lacked ‘reality fiscal solutions’ in easing the plight of the already impoverished workers in Zimbabwe.
“We’re not happy firstly with the recent move made by the Finance and Economic Development Minister Professor Mthuli Ncube, the RBZ – Reserve Bank of Zimbabwe Govérnor – Mr John Mangudya and Permanent Secretary for Finance and Economic Development George Guvamatanga in a press statement where the Finance Ministry has effected sharp increments in interest rates charged on all bank loans”.
The new lending rate means that mine workers who were servicing their loans will be adversely affected as the move will erode thier meagre wage which has been failing to rescue them from the steep slopes of abject poverty.
Meanwhile workers are disgruntled at this move which only caters for the concerns of the employer while the wage dispute between NEC – National Employment Council and mine workers in Zimbabwe remains unresolved for the past two decades.
“That’s why we’re rejecting all the adjustments made by the Finance Minister and we’re expecting the concerns of mine workers to be addressed first before touching on banking regime fiscal adjustments which are going to deal a severe low on the proletariate in Zimbabwe”.
Apparently, Professor Mthuli had said the increament in lending rates were targeted at stopping speculative borrowing. Central Bank’s MPC – Monetary Policy Committee noted at the just ended weekend that interest rates would be increased to levels in line with the rate of inflation.
Nomboka has also registered further displeasure adding, “Secondly, the restoration of the multi-currency regime is a welcome development but is consequently a negative blow to mine workers since using the Interbank rate will further fuel ‘upwards’ the already acuted prices of basic commodities while good money will be subsequently chased away as long as the Rtgs$ remains legal tender in Zimbabwe – thus Govérnment must do the right thing by scrapping it off and allow a new multi-currency regime without the Rtgs$ and the Bond Note to bankroll”.
Professor Mthuli Ncube on Monday outlined new Government measures to tackle the worsening economic crisis which has seen inflation soaring at 191 percent – and is among the highest in the world.
Consequently, the Zimbabwe Dollar has been backlashing against the US Dollar.
Where the Interbank rate has been profered, inflation rate has simultaneously skyrocketed to very high levels, a development which has scared-away investors and caused indigenous businesses to close shop.
“Mr Mthuli must quickly come up with an economic stimulant that will (within a short period of time) revamp business in Zimbabwe and must not create solutions that contradict recovery of our economy while increasing the burden being borne generally by local businesses ( both small and big), the informal sector and mine workers and pensioners in particular”.
The new economic measures introduced by the Finance Minister might be erosive to the gains the Seconding Republic was beginning to realize in thier quest to create an upper middle income society by 2030.
“We are therefore urging the Finance Minister to consider introducing subsidies for basic commodities, and fuel as practical measure to cushion workers from the pressure caused by high cost of living against the bedrock of a wage bill which is way down below the PDL – Poverty Datum Line. And it is sad to note that the increase in lending rates is not only affecting workers but employers as well who are heavily relying on excessive borrowing from financial institutions”.
With these new measures on board, employers are left with no option but to redirect their financial burden upon the workers who will end up pocketing nothing at the end of thier sweating.
“All companies use loans and other credit facilities. The over 200 percent interest rate is highest in the world and will simply make employers take from workers and pensioners.
And some will reduce production and while many workers will be forced to resign or go on retrenchment. It’s total madness”!
Consistent with the collective aspirations and determination of the people of Zimbabwe to achieve an Empowered and Prosperous Upper Middle-Income Society by 2030, the Second Republic launched Vision 2030 to chart a new transformative and inclusive development agenda.
Some economists have since argued that the NDS programme does not have interactive linkages in its national development pillars.
Thus the Government of Zimbabwe ought to take drastic measures to ensure cohesion of the economic blueprint before it metamorphosises into a self-defeating creature which might ultimately harm rather than revive the economy. Interactive pillars such as strengthening of the foundations of economic growth, the revitalizing of the private sector, improving of the quality of life and strengthening good governance and security should therefore be among Government’s highest priorities.
Mthuli Ncube has since banned US Dollar sales discounts and declared use of interbank rate for pricing is now law in Zimbabwe