By Gift Mashoko

The parallel market pricing system and speculations by consumers, retailers and producers are contributing factors to the current high inflation, Minister of Finance and Economic Development has said adding that the country is moving step by step towards full currency reforms which will eventually deal with inflation.

Professor Ncube said this during an interview with Bloomberg Breakfast this morning at the World Economic Forum in Davos.

Asked on what could be driving inflation in Zimbabwe, Professor Ncube highlighted that this was attributed to the parallel market pricing system among other factors.

“It’s being driven by the parallel market in terms of pricing. That is what has pushed up the prices. People speculating, retailers speculating and producers speculating. That has pushed up inflation.

“What we are doing about that, is that on the fiscal front we make sure that there is fiscal discipline, cutting back on Government expenditure, making sure that it is not the fiscas that is adding pressure on the inflation. We are moving step by step towards full currency reforms which in our view will deal with inflation,” he said.

Asked why the measures will work in a country short of fuel, cash, food, Professor Ncube said that these were just symptoms of the crisis as the measures would help.

“These are just symptoms of the crisis. These measures will work. We have to walk with this road. What has caused the crisis in the first place is the high budget deficit in the past and we are dealing with that.

“We are expecting inflation that is single digit, but it will take a few months for it to get there. Part of it is technical in the sense that we are moving from a low base and a sharp hike in prices in 2017, it has moved us to a higher level of the index creating a technically higher figure in inflation,” he said.

On introducing Zimbabwe’s own currency, Professor Ncube said there was need for fiscal discipline which is key, curtailing runaway government expenditure, compliance on the revenue collection front, build micro institutions for full monetary policy conduct by introducing a monetary policy committee and address arears.

Minister Ncube said that President Emmerson Mnangagwa had returned home to address the challenges the country was facing.

“The President communicated that he wants to restore calm in Zimbabwe, get Zimbabwe working again. It is the right thing to do. He is not the only leader who has done this in response to domestic issue. We have seen it done in the UK and USA.”

From what Minister Ncube said, it shows that with fiscal discipline as key, Zimbabwe’s economy will surely grow. This, Zimbabwe can only do as a united people working towards the same vision.