In a bid to address the skyrocketing prices of basic commodities in the country, Zimbabwe’s Ministry of Finance has lifted all restrictions on their importation.
The move comes amid growing concerns over the rising cost of bread, flour, cooking oil, mealie-meal and other essential goods. The basic commodities affected are those goods or products which people use in their day-to-day lives.
According to Finance and Economic Development Minister Mthuli Ncube, in an effort to increase the availability of essential goods to the public, all basic goods will no longer require import licenses and will be exempt from import duties and taxes upon entry into the country.
Ncube further noted that, the recent rise in macroeconomic instability has led to a significant increase in domestic inflation. This inflation is largely driven by a preference for the US dollar as a savings currency, resulting in a skewed demand for it.
The ongoing preferential treatment of certain sectors has resulted in significant strain on the exchange rate, causing the Zimbabwe dollar to trade at a high velocity of ZWL$1,116.75 against the US dollar.
As of Friday, the exchange rate for the local currency was no less than ZWL$2,350 per US$1.
The introduction of these measures coincides with a period in which the economy experienced a growth rate of four percent last year, accompanied by a record-high influx of foreign currency and increased productivity in the manufacturing industry.
Ncube said demand for the US dollar has been growing in Zimbabwe; and it is estimated that a large portion of domestic transactions are now being conducted in foreign currency.
Monday, the Central Bank of Zimbabwe announced the launch of a new digital token that is backed by gold and will be recognized as legal tender.
The Central Bank confirmed that its new digital tokens, which are backed by the country’s gold reserves, will be considered a form of digital currency.
Zimbabwe has been drowning in double and sometimes triple digit Inflation for over a decade.
According to Ncube, the Treasury has made a decision to implement a full retention policy for domestic foreign currency sales.
The lifting of import restrictions on basic commodities in Zimbabwe is a significant step towards addressing the rising cost of living in the country. While it may have its challenges, it is hoped that the move will ultimately benefit consumers and help to stabilize the economy.
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