Bacossi set to return?

As some of you may remember, in 2008 the Reserve Bank of Zimbabwe introduced the Basic Commodities Supply Side Intervention programme which was popularly known as Bacossi. The programme was to ensure the supply of basic commodities at affordable prices to the low-income households as a means to protecting them from the crippling hyperinflation which was rapidly headed towards 100 million percent. While it was a noble policy at face value, the government simply did not have the funds to execute this and as a result, printed money to finance it thus exacerbating the prevailing hyperinflationary environment.

Now, according to the Minister of Industry and Commerce, a similar programme is set to be introduced within the next two months. Once again, this is a noble idea when tested for morality but ludicrous when tested for economic viability. Government is currently saddled with unnecessary indirect subsidies such as fuel, bread, electricity and the $1 ZUPCO buses among other things. At this rate, the controversial 2% transfer tax, which was meant to go towards the repayment of our international debt obligations, is quickly becoming inadequate. It is important that government minimizes its market interventions and redirects the funds towards debt repayment to unlock fresh lines of credit or we shall find ourselves back at square one. Zimbabweans cannot afford to be taxed any more than they already are.

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