Abandon the controls

2018-04-26 06:01

SOUTH Africa must learn from the Zimbabwe experience. From 2009 to 2013, when Morgan Tsvangirai’s MDC was running the finance portfolio, Zimbabwe lifted all foreign exchange (forex) and price controls.

The results were spectacular. Economic growth shot up to an average of eight percent per annum compound for five successive years and inflation went negative by as much as seven percent. (Zanu-PF government policy and corrupt practices have subsequently reversed all gains made.)

Zimbabwean economist Edward Cross said: “What authorities fear the most about relaxing exchange controls is that they will run out of foreign exchange. This is false, and Zimbabwe has proved it.

“We did away with exchange controls and prices stabilised.

“South Africa has one of the most restrictive exchange control regimes in the world. The same with Venezuela. We could solve their problems in an hour.”

Every day, SA’s forex controls destroy more economic growth, jobs and transformation. Every day they increase poverty and exacerbate inequality.

• Jasson Urbach is a director of the Free Market Foundation.

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