The Govt Has Not Stopped Making Payments - Guvamatanga1 year ago
Secretary for Finance and Economic Development, George Guvamatanga, has scoffed at claims that measures implemented by the Government to stabilise exchange rate volatility and inflation are having a negative impact on the economy.
Speaking in an interview with State media on Thursday, Guvatamatanga also said it is not true that the exchange rate has stabilised and inflation has come down because the Government had stopped paying for goods and services supplied.
He said the government has not stopped making all payments, but only those invoices and contracts priced at the parallel market rate, or overpriced. Said Guvamatanga:
There is a big misrepresentation that is going on in the market that the Government stopped making payments, that is not correct, because if we had stopped the Government would not have been operational by now, if we were not paying anyone right now all our operations would have grounded to a halt.
What we have said is that we are not paying invoices and contracts priced at parallel market rate, or overpriced.
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Obviously, there are those who are adamant and some who have adjusted, some are adjusting voluntarily without approaching them that we now want to change prices.
Guvamatanga insisted that the government had to stop the payments as the was “overheating”. He said:
The economy was overheating; everyone was overtrading and the majority of people who were reporting increased business activity were foreign currency trading; the demand was artificial. It was artificial demand because everyone wanted to get rid of Zim dollars.
So there is a readjustment that is required, even the Treasury has to readjust such that even our revenue, we must review them down.
I do agree demand has gone down, but people must know that some of the aggregate demand was artificial.
Gumamatanga said there is a need for the private sector to go back to basics and do away with overpricing goods. He said:
It’s not a Government (only) thing. P ‘n Pay needs to do it, OK (Zimbabwe) needs to do it, Spar (Zimbabwe) needs to do it, everyone needs to adjust.
Everyone needs to adjust and say the days of pricing things at 1,4, 1,5 (times the actual price are gone).