HARARE – As the country’s economy continues to die, and cash shortages worsen, the debate on the need or otherwise for Zimbabwe to embrace the South African rand as the country’s anchor currency is gathering momentum.
This comes as the Confederation of Zimbabwe Industries (CZI) encouraged the government at the weekend to enact a law which will allow the prices of goods and services, including salaries, to be denominated in rands — as a way of promoting business competitiveness and the wider use of the South African currency.
“We are not calling for the dumping of the US dollar … what we are saying is that we need to look at a framework that ensures the little hard currency that we may have is ring-fenced.
“Our argument is that when we adopt the rand, we cannot have an individual coming from say, Pakistan, searching for the rand.
“We can continue importing US dollars, but history has shown that that alone cannot be a sustainable solution to the problem,” CZI president, Busisa Moyo, said.
But some experts warned in interviews with the Daily News yesterday, that the calls by business to peg prices and salaries in rands were akin to trying to adopt the South African rand via the back door — and that this would not help Zimbabwe.
“The cash shortage is not about the currency, but more about the lack of production. As long as we are not producing enough, we will not get enough rands anyway.
“What we need is producing enough to sell outside Zimbabwe for us to get foreign currency. There is also the argument that the rand will not be attractive for people to come in here and take it outside like the United States dollar, but it is not like these people are coming in here and stealing it.
“They are being given the money in exchange for something,” economist Witness Chinyama told the Daily News.
Another economist, John Robertson, also said the proposals to have prices and salaries pegged in rand were misplaced, as the country desperately needed to instil confidence among investors.
“The cash shortage is because we are not earning money. What we need to fix is the lack of confidence in the country. That is what is causing externalisation, as people are taking out their money out of this country.
“So, what we are saying is, let’s fix the confidence issue instead of promoting a currency. The issue is, we can no longer make most of the things we used to make because of investors’ lack of confidence in this economy,” Robertson said.
“There has to be confidence by external banks that if they lend money to Zimbabwe, they will get it back. Right now that confidence is not there.
“If we say let’s go for the rand, it’s like saying let’s not fix the real problem, but see how we can cope with a different currency.
“We need to make money by working, and at the moment we are not working and we are not producing. We need to go back to producing goods that will be good enough for foreign markets,” Robertson added.
Despite authorities injecting more bond notes into the market and increasing their weekly importation of US dollars by 50 percent, the government continues to battle to stem the country’s severe cash shortages, which have seen desperate Zimbabweans besieging overstretched banks as they despairingly try to withdraw their money.
This also comes as banks are reporting a rising demand for cash despite the aggressive push by authorities to promote the use of plastic money and mobile platforms, as part of their measures to promote a cashless society. – Daily News