Govt Delays Payments To Farmers To Maintain Zim Dollar "Stability"
The Government is reportedly withholding payments for farmers who delivered their grain to the Grain Marketing Board (GMB) for fear that the payments might cause the Zimbabwe dollar to fall sharply.
However, the decision may negatively affect farmers’ preparations for the upcoming 2023–2024 summer cropping season.
Business Times reported multiple GMB officials as saying the parastatal has a month-long payment backlog.
A GMB senior official who requested anonymity was quoted as saying:
We last paid the farmers who delivered their grain on July 8, since then we haven’t been able to pay farmers due to the little amounts we are receiving from the Treasury.
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We don’t know what the farmers will do but we will pay according to the disbursements from the government.
Local contractors also expressed concern about the delay in payments.
Economist Gift Mugano told Business Times that the current stability is unsustainable. He said:
This is a massaged stability as you can’t starve the children and claim to be saving a great deal of money.
The government should pay farmers and contractors in batches so that they can use it as working capital for their businesses.
The authorities should allow supply and demand law to take centre stage here, not suppress supply to create demand.
It’s a tragedy that the purported stability came at the expense of aggregate demand and bringing the economy to a grinding halt as people are going to the informal businesses that do not pay taxes and rates resulting in fiscus losing significant revenues.
Mugano warned that if the current liquidity squeeze continues the country’s economic activities will slow down.
More: Pindula News
