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(HERALD) I’m not against ongoing price blitz — Gono

I’m not against ongoing price blitz — Gono
By Victoria Ruzvidzo

RESERVE Bank of Zimbabwe Governor Dr Gideon Gono says he is not against the ongoing price blitz, but that the exercise should take a more holistic approach that addresses the supply side while avoiding unintended consequences. In an interview yesterday, the central bank chief said it was unfortunate that his advice had been taken in the wrong context. He called for soberness and sustainability in the whole process.

"An unfortunate impression has been created suggesting that the governor is working at cross-purposes with Government . . . nothing could be further from the truth.

"Advice that is being given by me should not be misconstrued as opposition to the current price stabilisation measures that seek to cushion consumers against the unbridled profiteering we have been witnessing through daily and in some cases hourly price increases.

"That madness needed to be dealt with decisively," he said.

But mechanisms that would ultimately lead to inflation reduction and improved production capacity had to be adopted in the process.

"However, to the extent that inflation control is the core function of the central bank and, therefore, of this governor, it is important that the nation realises that apart from attending to consumers’ plight, there is need to attend to the production plight — what we call the supply side — to avoid the emptying of shops without replacements the next day."

It was important that the costs of any business be covered in the ultimate price that a consumer paid, with allowances for a "reasonable" profit margin.

However, most businesses had abandoned this in their pricing formulas.

Dr Gono said what had happened in the last few weeks was a clear indication that trust between the Government and business had broken down.

This needed to be mended urgently through revisiting the social contract.

He said business had betrayed the social contract framework as it began to increase prices outside the agreed framework.

Three protocols on pricing and incomes stabilisation, productivity enhancement and foreign currency were signed by the three social partners on June 1, but they have not been implemented with partners counter-accusing each other of reneging on commitments made.

"It’s not too late for us to go back to the framework of understanding, a framework of tolerance, a framework of accountability to one another as espoused in the Protocol on Pricing and Incomes Stabilisation.

"There is need to reconvene soonest, take stock of what has happened and, as partners, recommit ourselves to it by observing and following elements of the protocols signed with each partner being in full control of their constituency," said Dr Gono.

It has been argued in various fora that whereas Government has full control of its constituency — be they ministries, the central bank and parastatals — in terms of policy implementation and compliance, and labour — comprising the Zimbabwe Congress of Trade Unions, the Zimbabwe Federation of Trade Unions and the Apex Council — is equally in control of the labour force, business leaders appear to be the weakest because they do not seem to have leverage over their membership, hence the need for them to demonstrate that they are in full control.

"The lesson business must learn from the current blitz is that no business can ever thrive and make a profit in a environment of antagonism with the Government; and from Government’s side, the lesson arising from the current shortages is that no Government can hope to fulfil the aspirations of its citizens, especially labour, civil society and the generality of the populace, in an environment of serious conflict such as it has with its business community; and the lessons for labour are that when Government and business are fighting, the workers become the grass that suffers when two elephants fight."

The current blitz needed to put more focus on the empowerment of the majority of the people through a broad based small and medium business development programme with roots in local ownership at the grassroots level.

Growth points would be turned into manufacturing hubs, be it oil processing, milling, baking, meat processing, fruit and vegetable drying and other such businesses.

This strategy would deal with issues such as the current conflicts, scarcity and high inflation which would breed antagonism."It was President Mugabe who has often reminded this nation that ‘We are all witnesses to the futility of trying to turn around our economy in an environment of pointless conflict’," said Dr Gono. The business community would, in this instance, be challenged to come up with mentorship and smart partnership proposals to allow for the transfer of knowledge and technology while incubating entrepreneurial skills.

Meanwhile, Dr Gono yesterday refuted speculation that he had political ambitions and was not in good books with some Cabinet ministers and senior members of Zanu-PF.

"I am not a politician, but a technocrat and practical governor of the central bank whose duty is, among others, to give advice to the Government in its various forms and I am doing exactly that without fear or favour. I do not hold any political ambitions either. As governor, I hold an apolitical office in the land and I have no known enemies in either Zanu-PF, MDC or any other political party." He said he had "excellent" personal and working relations with the entirety of the Presidium, including the often-quoted Vice President Joice Mujuru and Minister of Rural Housing and Social Amenities Cde Emmerson Mnangagwa.

He said all Government ministers remained his seniors and "I have the privilege to advise them individually or as committees or taskforces and when that advice differs from the conventional, it should not be viewed as adversarial".

Labels: GIDEON GONO, PRICING, ZIMBABWE

posted by MrK @ 5:21 PM