Captains of industry have urged the Reserve Bank of Zimbabwe (RBZ) to ease its strict monetary policy in the post-election period claiming this will increase liquidity and boost aggregate demand.
They say tighter monetary and fiscal policies are hurting the economy as companies are operating at reduced capacity.
In months leading up to the 23 August elections, the RBZ and the Ministry of Finance and Economic Development pursued tighter monetary and fiscal policies and vowed they would remain in place for some time.
Speaking to Business Times recently, Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza said there is a need for authorities to strike an equilibrium when managing liquidity. Said Matsheza:
Now that the elections are over, we have now turned our focus to production and this will (only) happen when liquidity has improved.
It is our hope that the authorities will address the current liquidity squeeze to improve our capacity utilisation and aggregate demand.
Zimbabwe Stock Exchange-listed companies such as Willdale and Seed Co Limited have also called for improved liquidity during the post-election period.
The Bankers Association of Zimbabwe (BAZ) president Fanwell Mutogo told Business Times the banks understand the government’s position, but banks are of the view that the current tight liquidity situation is an unintended consequence of the monetary and fiscal measures.
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