ON Tuesday, the Reserve Bank of Zimbabwe (RBZ)’s monetary policy committee (MPC) said it was satisfied with the trajectory the economy is taking.
Under normal circumstances, this would be good news, but…
If the MPC gives the economy a clean bill of health, the markets respond positively because everyone will be confident that the MPC is a creature of its word.
If the MPC raises alarm, the markets sneeze.
It is worrying to see that the MPC is extremely happy that the annual inflation rate is falling, and will continue to fall.
Yet, on the ground the situation is completely different as the prices of basic commodities are headed north.
The inflation rate is said to have slipped to 194% last month, from 240% in March.
It is expected to decline further to 55% by the end of July this year, which is a sign that prices should have been falling, but alas it’s a different story altogether.
The truth is the MPC is just throwing figures around to give Zimbabweans the impression that a lot is being done to calm the waters and assuage the hard-pressed consumers.
The prices of goods and services have been shooting at a frightening pace since January.
One wonders, how then can inflation be declining vis a vis rising prices?
Power tariffs, fuel prices and local rates and taxes have been hiked, sparking relentless price hikes.
And yet what Zimbabweans continue to hear is that inflation is declining and they are better off today than they were yesterday. The hard truth is when inflation falls, it does not follow that hardships that confront people abruptly cease.
Government is only exposing how it is being economic with data to achieve selfish ends.
If government can mislead people about inflation, how then do they trust any other information it provides?
Can people trust what government says when it lies through its teeth about bread and butter issues? Can investors have confidence in a destination whose government struggles to release accurate data to aid decision-making processes?
By continuing to mislead the markets on inflation, government is shooting itself in the foot.
It is worrying that the central bank has chosen to follow the same self-destructive path that politicians have taken.
We believe RBZ governor John Mangudya must be frank about the direction the economy is taking unless he has become a pseudo politician like his predecessors.
If the RBZ tells people that they are well off when they are feeling the pinch, who will the people look up to for the truth regarding the pain they have endured for too long?
We urge authorities not to give conflicting market data if they are serious about helping this economy out of the morass it is mired in.