The government of Zimbabwe in two separate statements yesterday made about turns on lockdown regulations for international money transfer agencies and fresh produce markets. 7 days into the 21-day lockdown announced by the President, Zimbabwe has tinkered with the regulations a bit banning then allowing the sale of alcohol but only in shops for home consumption. Having reported only 2 new cases during the lockdown period the measures to reduce restrictions are worrisome. Citizens have cried out citing this may un-do any hope the nation had of containing the spread.
Foreign currency required
When the ministry of finance announced a response to COVID-19 of allowing transacting in foreign currency again our analysis was that the government required a way to boost foreign currency earnings because the usual sources would dry up due to the lockdowns happening across the world. True to form this was followed up with action compelling depositing of hard cash earned by businesses as well as a questionable fuel price increase at a time when crude oil prices are crashing in international markets. The ZERA statement showed a hefty increase in duty.
Now the Reserve Bank immediately directed International Money transfer agencies to resume operations during the lockdown. As of last night, these agencies were not offering cash pick up options but instead directing senders to electronic options. The RBZ has given them until Wednesday the 8th to start operating. With the nation relying heavily on remittances, the government has likely felt the pinch very quickly. While everyone who was critical of the lockdown cited the plight of those who earn from hand to mouth we may have forgotten one other entity which lives such an existence, the government of Zimbabwe.
Farmers and primary producers are essential
There was a massive outcry over the weekend as images circulated of Police officers in Mutare burned confiscated vegetables and fruits that were destined for a fresh produce market. The produce merchants had violated the lockdown law and set up shop. Now, while there is no excuse for going against the lockdown law the response of the police was questionable at best and atrocious at worst. Burning food in a nation threatened with food insecurity long before COVID-19 took its first patient. Many worthy uses for the confiscated wares could’ve been found. The police intended to send out a message, they unwittingly sent out two.
In the wake of the announcement of the lockdown, the ministry of agriculture quickly asserted that agricultural services were essential and would thus remain open. However, the status of produce market vendors was clearly not considered in this regard. For farmers and primary producers traditional retailers are not ideal because they pay on net 90 credit terms (90 days after delivery) in Zimbabwean dollars. Remember, this is a currency that has shed half its value in the first 90 days of the year. The fresh produce merchants are much more favourable to producers. Now producers have been left with stock they cannot sell. With no plan in place to assist them or mitigate their losses, watching their produce rot away was not ideal.
This problem is not unique to Zimbabwe. East African and Asian countries also rely heavily on informal sector produce markets. One particular image from India shows how seriously they have taken social distancing in their informal markets. Reopening markets such as Mbare Musika is not a problem but Zimbabweans are already anxious about the approach to it given our authorities track record in this regard. Relaxing these regulations after 7 days goes against the reason why we had a lockdown and the reason for the 21 days duration. With the lockdown itself having been instated with rather poor planning and little adaptation in the laws for local circumstances there is justified worry about how these changes to the law will impact what has so far looked like a winning battle against COVID-19.