Policy inconsistency may affect investor confidence: economists

Tapiwa Mufukwa |  10 months ago | business

Economists say economic policies and measures by government should be well thought so as to boost investment confidence.

This comes after government suspended lending powers by banks a week ago and then lifted the ban on Tuesday, a move which economists said could have been dealt with in a better way, through targeting the rogue financial institutions instead of imposing a blanket ban.

Economist Kudzanai Sharara said some firms depend on bank loans and bank overdrafts, therefore suspending these offers might have affected their operations.

Another economist, Persistence Gwanyanya was of the view that government made the right decision as the exchange rate was depreciating and prices were escalating.

Misheck Ugaro added his economic voice, saying it is important for government to clarify some of the measures it introduces so that all stakeholders are in the same breath with policy pronouncements.

The suspension on bank lending by government has been one of the measures to stabilise the Zimbabwe dollar and restore order in the market. The measures were also as a way to curb the growth in liquidity and money supply.

The central bank in a statement said the lifting of the suspension does not apply to those entities that are under investigation by the Financial Intelligence Unit for abusing loan facilities to the detriment of the economy and the unit has accordingly advised all banks of the affected entities.