“The country should not think of reintroducing its own currency without at least exports of $15 billion,”
Source: ‘Introducing bond notes insane, cruel’ – NewsDay Zimbabwe May 14, 2016
By Everson Mushava
Zimbabwe’s GDP is currently pegged at $10 billion, with imports of over $7 billion against exports of about $3 billion, creating a $4 billion trade deficit.
Government has proposed the introduction of bond notes to be supported by a $200 million Africa Export and Import Bank loan facility, which analysts have said was tantamount to reintroducing the long-abandoned local currency.
Biti told NewsDay Weekender on Thursday that the idea of introducing the Zimdollar at a time the manufacturing industry had collapsed and the country was experiencing the worst trade deficit now was “not only insane, but cruel”.
“That is a disaster. Firstly, the idea of introducing the Zimdollar is just insane, and this country was raped by its own currency.
“The country should not think of reintroducing its own currency without at least exports of $15 billion,”Biti said
He added: “Exports right now are just below $3 billion. Our imports are around $7 billion, so we have a current account of at least $3 billion, we are in the negative, and our current account is more than 15% of GDP. How do you introduce the local currency under that circumstance? It will be attacked.”
Biti said if current imports were averaging $7 billion, the $200 million support to the bond notes would be a drop in the ocean.
He said the major challenge was that companies had collapsed and government should have used the $200 million to resuscitate industries and improve imports.
“We should start focusing on supply side reform; this means kick-starting these closed companies,” Biti said.
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