Tuesday, September 29, 2020

Mugabe hints at possible reintroduction of Zim dollar

Barely less than a year since the Zimbabwe dollar was dumped as the trading currency in Zimbabwe and replaced by a multiple currency regime in February; talk of its return by the highest office in the land is worrying ordinary citizens and business owners alike.

President Robert Mugabe announced the Government’s plans to re-introduce the Zimbabwe dollar as a way of solving the fluidity challenges brought about by using multiple currencies.
Quoted in the state-owned media, President Mugabe said, “The use of multiple currencies is not helping our people much as the money is difficult to secure. We will be re-introducing our own currency by end of the year.”

Zimbabwe switched to the use of multiple currencies earlier this year to avert an economic holocaust as a hyperinflation well over the one billion percent mark made the local currency worthless. The country is trading mainly in the United States dollar and the South African rand.

Business analysts and the international community, notably the International Monetary Fund (IMF) have praised the positive impact of the use of foreign currency as a vital lifeline to the nearly defunct manufacturing sector. Independent forecasts have predicted a 3 percent growth rate for the Zimbabwe economy this year, a first since the turn of the century.

President Mugabe’s statements, however, conflict with earlier assurances made by the Minister of Finance, Tendai Biti, that the Zimbabwe dollar would not be returning soon, and that he (Biti) had “laid a tombstone on the grave of the Zimbabwe dollar”.

Bulawayo residents who spoke to The Sunday Standard expressed dismay at the news that the local currency could be making a comeback.
“I think it’s too early to be going down that road, life was tough then using the Zim dollar and you always had to quickly dispose of the money before it lost value,” said Bekezela Sibanda, a receptionist at a law firm. “At least with these US dollars and rands, you can keep and plan ahead.”
Prince Sithole a shop assistant said, “With forex at least you can buy groceries and shop around for things, that is impossible to do with the Zim dollar; it loses value before you can buy anything at all.”

A manager at an OK Zimbabwe branch in the city centre said, “The economy should be allowed to fully recover before we go back to the local currency otherwise we will just return to the mess of last year again.”

This month, all eyes will be on the budget announcement by Minister Biti and expectations are that he will also speak out on the issue of the Zimbabwe dollar’s return in transactions.

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The Telegraph September 30

Digital edition of The Telegraph, September 30, 2020.