Taming Forex Rates Through Commands Won't Work - Magaisa
The Zimbabwean government has suspended the use of mobile money and the stock market with immediate effect.
In a statement issued by Ndavaningi Mangwana, the Permanent Secretary in the Ministry of Information, Publicity and Broadcasting Services, the government said the move is meant to facilitate intrusive investigations, leading to the arrest and prosecution of “wolves in sheep skins amongst our population”.
United Kingdom-based constitutional law expert Alex Magaisa the move is bound to fails because it is not possible to tame the foreign exchange through commands. Said Magaisa:
The Mnangagwa regime has issued a decree banning the use of mobile money and the stock market. A garrulous statement by Secretary Mangwana reads like a criminal charge-sheet. It’s thrown the kitchen sink at mobile money companies with EcoCash as the principal target.
In a country that’s been facing cash shortages for years and in which the majority of ordinary people rely on mobile money for everyday transactions, this move is bound to cause serious headaches. You can’t tame the forex rates through commands. It doesn’t work.
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Rather oddly, the Government says the ban is intended to allow market forces to determine a “genuine rate”. This is counter-intuitive: how do you ban a large part of the market and market instruments and still claim that you want the market to determine a genuine rate?
We can expect a heavy-handed approach following this long-winded and incoherent statement. This will include arrests of executives who will be tossed from pillar to post by a regime that has run out of ideas and has adopted a scatter-gun approach to economic management.