Confederation of Zimbabwe Industries (CZI) has called for the immediate suspension of Statutory Instrument 127 of 2021 saying the new law threatens the progress industry had made towards recovery.
Government last week announced SI 127 of 2021 which compels business to peg prices of goods and services in line with the official exchange rate.
It has been reported that, the new regulations penalise those found on the wrong side of the law including businesses refusing to transact in the local dollar.
In a statement, CZI said the SI must be suspended to allow for a dialogue to exist between government and business.
”CZI believes that SI 127 should be immediately suspended. CZI agrees with the issues that the Ministry of Finance is trying to resolve; control inflation, eradicate the use of the black and informal markets, bring stability/sanity to the foreign currency markets, and prevent abuse of the foreign currency obtained on the auction for profiteering and other opaque activity.” The statement reads.
They added that business that previously were able to bring forex into auctions must come back.
”It is our submission that the SI127 does the exact opposite of the above and indeed will; reduce the amount of foreign currency in the official and formal channels, create USD inflation to achieve a perceived required return by business, bring businesses that previously were able to generate forex into the auctions.” They said.
Furthermore, the CZI stressed that engagement between industry and the government can resolve such aberrations.
”The industry body does not support such behaviour in any way, but we also believe it does not warrant the blanket SI which has far-reaching adverse implications for the economy.” CZI said.
They added that, ”Pursuant to the foregoing, CZI, therefore, calls for urgent dialogue with the Ministry of Finance and monetary authorities to map out a way forward.”
The industry reiterated that the use of the auction rate would result in consumers converting their US dollars to ZWL on the parallel market prior to purchasing.