Harare – Zimbabwean opposition Movement for Democratic Change (MDC) party leader Morgan Tsvangirai has called on President Robert Mugabe‘s administration to adopt the South African rand as its major trading currency amid cash shortages in the southern African country.
Zimbabwe introduced a surrogate currency called “bond notes” this week on Monday to avert a cash crisis that has resulted in the majority of Zimbabweans failing to access their money from local banks. The country’s central bank governor John Mangudya said the bond notes were backed by a $200m Africa Export Import Bank loan facility.
Despite being rolled out to the market, the bond notes have failed to ease bank queues amid reports that the surrogate currency is in short supply.
“I urge the government to open negotiations with Pretoria so that we adopt the Rand as a major currency ahead of the US dollar because we trade a lot with South Africa compared to the Unites States of America; 95% of our economic activity is with the rand,” Tsvangirai told reporters at the MDC party headquarters in Harare.
‘Zanu-PF’s policies are short-lived’
The former prime minister slammed the country’s central bank for introducing the bond notes saying they were not the solution to the country’s liquidity problems.
“We can all be proud to be Zimbabweans with our own dollar but it does not mean anything if it’s worth nothing. Time has now come to bring to the attention of the Zanu-PF government that all its policies are short-lived and bringing these bond notes that I equate to bond paper is suicidal; this is the last nail on the country’s economy,” added the former premier.
However, Zimbabwe’s finance minister, Patrick Chinamasa, told News24 that Harare would maintain the status quo.
“We adopted the multi-currency regime and the rand is part of the currencies that we are using and people have a choice to use the rand or the US dollar or any other currency,” said the finance chief.
Meanwhile, economist and University of Zimbabwe lecturer Ashok Chakravati said adopting the rand would bring stability to the country’s financial market.
“In 2009, about 60% of the currency that was circulating in the country’s financial market was the South African rand and so we can adopt it informally and have our budget and prices of goods and services pegged in the rand currency,” said Chakravati.
Zimbabwe abandoned its own currency and adopted the multi-currency system at the height of the country’s hyper-inflationary period. Some economists blamed the country’s economic meltdown on chaotic land grabs embarked on in 2000 that displaced over 4000 white-commercial farmers and their employees.
Chinamasa said that Zimbabwe would only re-introduce its own currency once there was a boom in the economy. – News24