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Fidelis Munyoro
Chief Reporter
Kadoma-based businessman Mr Langton Mabhanga has noted with approval President Mnangagwa’s response to end the burst of high inflation over four months of this year and extortionist pricing of goods and services by some businesses.

In a recent interview, Mr Mabhanga welcomed the move describing it as a magic potion needed to restore stability in the economy.

He said the Zimbabwe dollar was becoming hot cash chasing the United States dollar on the black market, but now is a dying ember with no flames.

“The recent introduction of the Mosi-oa-Tunya gold coins has seen in excess of $4 billion redirected towards the novel coins,” he said.

“This has been a master stroke for mopping up Zimbabwe dollars which potentially could have been hot money chasing the USD thereby fuelling inflation.”

But following a cocktail of measures to arrest the black market, consumers have a reason to breadth a huge sigh of relief.

“President Mnangagwa’s May 7 2022 pronouncement that barred all banks from lending to Government, corporates and individuals marking the commencement of the most strategic and emphatic process to tame inflation in Zimbabwe,” he said.

When lending resumed new rules were in place to stop speculative lending.

“The reinstatement of the willing buyer-willing seller foreign currency measures to re-rail the auction system alongside the agitation and sustained vigilance of the Financial Intelligence Unit have fortified the war against inflation.”

The performance of the economy was taking a knock from unscrupulous individuals that were manipulating the currency.

With the Government insisting on tight fiscal discipline since the advent of the Second Republic and the Reserve Bank of Zimbabwe curbing growth of money supply, Zimbabwe should have low inflation. However, the private sector, and especially those borrowing for speculation and non-productive uses, or arbitraging over time or between exchange rates, have been driving growth in money supply.

Some Government suppliers have also been fingered for inflating invoices or using local currency payments to mop up US dollars on the black market as they battled to preserve value.

The Government has fought back with enforcement of several measures including setting interest rates at 200 percent.

This is set to continue for a while as the Monetary Police Committee confirmed recently, making speculative borrowing prohibitive.

Government has also launched gold coins that have already pulled $3,7 billion in local currency out of circulation.

The problem of Government contractors has been addressed by spacing payments and paying half in foreign currency, to pull the potentially honest out of the black market, and by checking every single invoice before payment to ensuring the pricing offers both value for money and has not been calculated at black market rates, to dampen down those taking chances.