Speculation fuelling panic buying, black market

IT would appear Zimbabweans have not learnt their lessons from the past as seen in the panic buying of basic commodities that started early this week. This has, in some cases, consequently created artificial shortages as people hoard basic goods in their homes. But the truth of the matter is that no matter how much you can store, it will always run out as long as there is a genuine shortage on the market.

It would appear that government's past record of failing to properly communicate some of its decisions — an art that Finance minister Mthuli Ncube needs to consider — often fuel public speculation and drive people to behave irrationally, as in the current case where they are hoarding basic commodities which they would still exhaust. And what happens after that?

Ncube and Reserve Bank of Zimbabwe governor John Mangudya recently announced a series of fiscal and monetary stabilisation measures to address the economic problems that the country is facing, but the technical nature of such presentations has given rise to many interpretations, many of them merely mythical, and these have significantly contributed to the panic that we have seen over the last few days.

Understandably, Ncube indicated right from the beginning that resolving the country's multi-faceted crisis was going to be painful and Zimbabweans should brace for it. The need to continue on that path, fully communicating every move as and when it is implemented, remains important. For instance, people would want to know for how long these economic stabilisation measures are going to be with us, and is the shortage of certain basic goods part and parcel of the austerity measures?

The absence of such critical lines of communication has seen the shortage of commodities like fuel and the hiking of prices of basic commodities driving people into hoarding of products such as cooking oil which have been fast disappearing from supermarket shelves. In a way, this reveals the selfish streak in many people, who would rather have many, while others — perhaps without enough disposable lump sums — have nothing.

The relevant authorities really need to find a way of inspiring public confidence so that government's stabilisation policy finds takers and, consequently, see some kind of stabilisation on the market. What the current situation has simply done is to remind people of the socio-economic holocaust of 2007-2008, and there is a tendency to respond in a manner they did back then — particularly when there is suspicion on whatever policies government wants to implement. The burden of history can often be too heavy a load to carry for the ordinary man.

Uncertainty around government's stabilisation policy is also behind the panic ballooning of the foreign currency black market rates. Prevailing conditions in the economy such as foreign currency shortages speak to a lack of confidence in the government and its vision. So government's first port of call is to win that confidence through constantly engaging people and disclosing whatever is going on behind the scenes.

President Emmerson Mnangagwa is traditionally known for playing his cards close to the chest, but having touted himself as a "listening President", there is need to take further so that be becomes a "Speaking President" too to avoid all manner of speculation, which is a major driver of behaviours such as panic buying.