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Total Economic Collapse Imminent - Mugano

Total Economic Collapse Imminent - Mugano

Economist Gift Mugano said that the Government has failed to introduce policies that would protect local industry from the worst effects of rising fuel prices on global markets.

Early this week, the Zimbabwe Energy Regulatory Authority (ZERA) increased the price of petrol to US$1.73 per litre from US$1.68 while the retail price of diesel also went up to US$1.76 from US$1.74 a litre.

Speaking to Business Times, Mugano said it is imperative for the Government to consider scrapping some levies to avert total economic collapse. Said Mugano:

We are going in a one way direction and there is no turning back as it seems like policymakers are passing on the net effects of external shocks without them watering down by means of policy recourse.

It is high time that the government should relook at their pricing model of fuel as they should relook at some tax heads, for example, they should remove the Zimbabwe National Road Administration road levy since we are getting that from the tollgate.

Also, take out the strategic reserve levy for the purposes of reducing the burden on the economy but that is not happening.

He said when fuel prices go up, inflation will inevitably rise, pushing the economy towards a total meltdown. Said Mugano:

The development will only worsen the inflationary pressures which are already giving us a headache.

The economy is going to a point of no return in terms of the total economic meltdown as we are keeping giving poison to a sick person that is in the intensive care unit.

Total economic collapse is imminent with this direction and collapse normally happens on the currency side and would push us into default dollarisation which we said is going to happen in June and now we are heading towards that.

Apex Council secretary David Dzatsunga said another round of price increases will push the poor worker deeper into poverty.

More: Business Times

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21 Comments

Gafa 2 weeks ago

Unoda economy ife rungani its dead already


Gringo 3 weeks ago

Economics dzema potatoes 🥔 idzi😆😆😆😆


𝗡𝗼 𝗖𝗿𝗶𝘀𝗶𝘀 𝗶𝗻 𝗭𝗶𝗺𝗯𝗮𝗯𝘄𝗲 3 weeks ago

𝗜𝘁𝘀 𝗷𝘂𝘀𝘁 𝗮 𝗽𝗮𝗿𝗮𝗱𝗶𝗴𝗺 𝘀𝗵𝗶𝗳𝘁 𝗼𝗳 𝗺𝗼𝗻𝗲𝘁𝗮𝗿𝘆 𝗮𝗹𝗴𝗼𝗿𝗶𝘁𝗵𝗺𝘀.


Cash Talker 3 weeks ago

Some people will never take advice, they just can't listen when the masses tell them to dollarise. They can't just admit that this rubbish we are using as our money is now just like the rubbish in the chamber,,,,, nxaaaaa


beware 3 weeks ago

our disaster preparedness leaves a lot to be desired .we killed public companies like NRZ ,Zupco, etc
the railway system could move goods cheaper and in bulk cushioning these sudden rises of fuel . now its a vicious cycle and capitalism wont relent ,and like death is never satisfied .who shall we run to ?


Dr XX 3 weeks ago

Zanu pf destroyed this country. Everything is falling apart. Ian Smith must be turning in his grave

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Machiavelli 3 weeks ago

The increase in fuel pump price has a multiplier effect on the economy. Take for instance bakeries. The suppliers of wheat and flour will bill the Baker for increased costs of delivery to the baker. Ditto the suppliers of the other 38 ingredients that go into the baking of bread (fats, oils, salt, sugar, yeast, incense colourants, preservatives, detergents etc.) will also pass on delivery costs to the baker. By the time baker has finished baking his bread, his own distribution costs will have directly increased his own overall costs. So the increase by the 5c per litre will have multiplied several times over by the time the bread reaches the shop. All these costs are burdensome to the consumer. The common man.

In Zimbabwe the situation is compounded by the duties and excise on fuel. If I am not mistaken, 42% of the pump price of fuel goes to government coffers, a ridiculously high percentage, which explains why fuel in Zimbabwe is higher than other countries in the region. By rights government should reduce duties, taxes and excise on fuel. But our government has limited sources of revenue as we have run down agriculture, tourism, manufacturing industry etc. Profligacy (huge appetite in recurrent/non productive expenditure) e.g. bloated bureaucracy, high government travel expenses... all require the taxpayer to cough up more than is necessary. Government does not live within its means.

Herein lies the seeds of the economic collapse. I have just touched on fuel. There are others, and I go on ad nauseam....


Machiavelli 3 weeks ago

@Blue 💙, there is a transport cost for every gramme of input, and not necessarily in direct proportion to the quantum and value. 10 kg of yeast transported from Gweru to Proton Bakers in Marondera for example....

I rest my case

Blue 💙 3 weeks ago

Ooh, you have broken down the industrial process. That's cool, l like that.
Note that on your ingredients, not all are used in bulk. Stuff like preservatives (sodium benzoate etc), they yeasts and colourants are used in tiny quantities they don't really affect anything during product costing. Tiny, like in the mg per kilogram.
Cost spreading. Even if you run on generator all day, the accumulative cost is spread throughout the number or yield of products manufactured. Example, let's say you incurred 9000USD costs on generator fuel to produce 80 000 loaves of bread, the cost spreads theough your daily output yield. Preaching to the choirand l know, but if you do the math, you'll see that the rise of fuel cost that has occurred is insignificant. It's a small increment that can be buffered easily.

chati homu! .....chareva 3 weeks ago

well said Mugano


Citizens 3 weeks ago

Mthuli gvt mutambirissi RTGS salary ndokuti asarare pabasa.


Observer 3 weeks ago

Sad when people think they are clever and know what they are doing and refuse to listen to advice then create hardships for the people.


Machiavelli 3 weeks ago

To minimise risk of courting the ire of @Blue, Chikiti, VYBZ Ketero et all I shall desist from commenting.


Blue 💙 3 weeks ago

🤣. No bro, c'mon. Unravel your mind. It's a safe place 😃

Worzell Gummidge 3 weeks ago

The yelping of mongrel curs, must never dishearten man of superior intellect, such as you Machiavelli. Mankind needs your illuminating opinions. And remember: mutts may howl at the moon but, they'll never become astronauts.

Gabarinocheka 3 weeks ago

mene mene tekel uphasim!
the writing is on the wall


Ginious 3 weeks ago

total imminent kuitaseiko.Chingotii the economy has collapsed totaly full stop


sekuru waBona 3 weeks ago

what boggles the mind is ncube on Tuesday after cabinet briefing said things are ok

somewhere somehow either these guys are sabotaging the economy or ....

by the way why is Edith not seeing that things are not going well

like at the politburo meeting he was saying there are fake abductions and no electoral reforms for 2023 yet he is the one who promised diaspora vote and accepted the international observer mission and monthlante commission recommendations

may somebody please tell me what kind of a leader do this country has?


Tateguru 3 weeks ago

I think the Finance Minister and the RBZ Governor should be listening people. People have been talking ever since the introduction of the RTGS. It was 1:1 then and people argued it was practically not so but these two elite men counter argued supporting their own insights.
Today it is visibly and practically that the ratio is over 1:300.
Had these two chaps listened we could be singing Cloud 9 now.

All the same it's never too late for a turn around if only they listen to current economic analysis from the public


Fari 3 weeks ago

I myt not be an economist but as a Zimbo, sure I can see kuti zvinhu zvirikudhakwa and gvt haina kana clue kuti ingaitesei kuti zviite nani.


Worzell Gummidge 3 weeks ago

Actually, they know what they are doing. Everything they do is deliberate & methodical. They know the problems & they know the answers. The economic challenges are deliberately designed to enrich the elite while impoverishing the middle & lower classes. We are led by a ruthless Mafia Clique, who in my opinion, have become multi-millionaires & billionaires by deceiving the public with convoluted economics jargon while ignoring common sense.


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