First things first; we promised to update you once the SI Instrument (85 of 2020) was published to confirm the return to multi-currency. It has since been published and boy were we right! Goodbye mono-currency and all the best to ZWL is what we can say for now.
Back to today’s business. Treasury has since published a statement on ‘Economic Mitigatory Measures to contain COVID-19.”
We have seen how other governments have responded to help resuscitate their struggling economies. Ours is such a big yawn. The statement is all over the place and lacks details. Only ZWL500m explicitly mentioned (USD20m at the fixed 1:25 rate). There is also a ZWL200m proposed monthly transfer. How much is that per individual? Even assuming a conservative 1m affected people, that’s like ZWL200/person/month. How much ZESA does it buy? Loaves of bread? The rest remains a wish list.
Companies and individuals expected more concise direction from Treasury. Tax breaks maybe? IMMT waiver? Corporate tax reduction? These are extraordinary circumstances. Money has been wantonly printed before for agriculture. This is a nationwide pandemic which needs all hands on the deck!
For now we are really on our own. This was a perfect opportunity for gvt to ramp up whatever resources, even through the printing press, to help companies keep afloat.