There is enough fuel in the country but the government does not have the foreign currency to pay for it, according to President Mnangagwa’...
There is enough fuel in the country but the government does
not have the foreign currency to pay for it, according to President Mnangagwa’s
spokesman, George Charamba.
He told the Daily News in an interview that “There is fuel
in the country, (it is just that) we can’t afford it. Fuel suppliers in the country,
such as Trafigura and Glencore have fuel stocks running into millions but those
millions have to be paid for in terms of foreign currency.
Zimbabweans are notorious for single-cause reasoning. From
currency, we go to pricing. Gift, if your raise the price, you restrain demand,
you follow? It doesn’t mean you have met the demand, you have only restrained
it.
When you raise the cost of fuel per litre, what it means is
to tell Gift that if you have fuel covering 200km per week, don’t embark on the
trip because I am making it more expensive for you to do so. It causes demand
restraint; that is a way of coping with a scarcity situation. It doesn’t solve
the scarcity issue. It simply allows you to cope better because you are also
restraining activity.
He denied that the Government was broke :”Why is it broke?
I am saying it is our priorities. Allocations of fuel are expending on the
basis of increased economic activity. This is a simple point. I don’t like this
propensity for negativity which I find rather difficult to explain.
Charamba said forex salaries will not happen :”No, can I
give you an example. In 2009 — then that’s another myth that you guys need to
debunk — what made us afford salaries in US dollars was because every civil
servant was on $100; do you understand? Yes, yes.
Now, if you look at the wage levels as of now, where do you
get that foreign currency? And if you can get it enough to make a wage bill
which is 70 percent of GDP, I mean why would you be unable to have enough
foreign currency to run your industry?
I just don’t understand the thinking of some of our
economists. It’s rather convoluted; it doesn’t make sense to me. In 2009, we
were all pegged at $100 basic wage, that’s why we were able to give someone a
modicum of what we call money illusion.
That illusion must not be allowed into a new era where we
find the lid on the wages has been removed.
That argument is a false argument and the sooner we move
away from it, the better it is for us. And by the way the trouble is that it
stands in the way of proffering real solutions because we are giving ourselves
false solutions.
The solution lies in stepping up your tobacco; industry,
stepping up your mining industry, tourism and, more critically, in transforming
your economy towards greater beneficiation, then your earnings improve.
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