Zimbabwe has achieved the impossible. We have figured out time travel and gone back ten years in time. Massive devaluation in monetary value, long fuel queues, inaccessible cash. This is the current state of the nation and we know it all too well- it was the state of the nation in 2008.
To ice the cake, Mthuli Ncube is taking the same missteps that the government was taking in 2008: he is fixing prices by decree. The only difference is that to soothe his intellectual conscience he is promising businesses that he will sort them out for the loss if they lower prices. How?
Here is his statement in full:
MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT, HON. PROF. M. NCUBE ON THE EXCISE DUTY REFUND FRAMEWORK FOLLOWING THE FUEL PRICE INCREASE UNDER STATUTORY INSTRUMENT 9 OF 2019
1. This Press Statement is being issued pursuant to the Statement by His Excellency, The President of the Republic of Zimbabwe, Cde. E. D. Mnangagwa on the 12th of January 2019.
2. As indicated by His Excellency, the persistent shortfall of fuel in the market is attributable to increased fuel usage in the economy, and is compounded by rampant illegal currency and fuel trading activities.
3. Consequently, Government has reviewed fuel pump prices to $3. 11 and $3.31 per litre of diesel and petrol, respectively.
4. Cognisant of the need to prevent generalized price increases for goods and services following the fuel price adjustments, Government has decided to provide relief through refund of excise duty on fuel consumed by registered businesses in the following sectors:
- Agriculture; and,
5. The relief to be provided will be equivalent to the difference between the prevailing rates of excise duty and the rates that were applicable prior to this change.
6. In order for businesses to benefit from the relief, businesses will have to meet the following criteria:
- The prices of goods and services by beneficiaries should have not increased relative the latest change in the price of fuel;
- The beneficiaries should be registered and compliant for tax purposes;
- Beneficiaries should be members of recognized business associations; and,
- Beneficiaries should provide evidence of the productive use of the fuel.
7. Consultative engagements will be held with the respective sectors, responsible Ministries and the regulatory authorities, with a view to determining modalities of implementing the relief.
8. Measures will also be put in place to provide for the smooth implementation of the relief during the transitional period.
9. Any abuse through misrepresentations of facts with a view to benefiting from the facility will result in denial of use of the facility, and imposition of a penalty.
10. Furthermore, Government would want to urge all business leaders to desist from any form of rampant market indiscipline, and is concerned with the recent unjustified prices increases, which serve to undermine Government efforts to restore macroeconomic stability.
11. In the spirit of working together, business should, therefore, complement Government efforts to revive the economy by refraining from any counter-productive measures such as wanton price hikes.
12. In this regard, all those who have increased their prices since the latest fuel price review should revert to the pre 12 January 2019 prices, given that Government has already put in place a price adjustment compensatory framework through Refunds.
Hon. Prof. M. Ncube Minister of Finance and Economic Development
13 January 2019
OK so say the minister is able to keep his promise to sort out businesses that heed his call, what happens to businesses in sectors not listed above? Techzim for example has to increase the price of its advert inventory because the increase in fuel prices affects us directly. Businesses covered by the promise will still have to pay the increased ad prices and still their costs will increase and they will still have to adjust their prices upwards! It’s a losing battle, prices never can be fixed by decree.
Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube
The Ministry of Finance and Economic Development is a government organ which administers the country's fiscal and financial aspects through its respective departments. It has various organs administered by different personnel and these include among other the Reserve Bank of Zimbabwe and the Zimbabwe National... Read More About Ministry of Finance and Economic Development