via Zim must adopt South African Rand – experts | The Source March 27, 2014
Zimbabwe must adopt the South African Rand as its official currency and dump the basket of multi-currencies currently in use if the economy is to perform better and improve liquidity, experts said on Thursday.
Zimbabwe is officially using nine foreign currencies including the United States dollar, Botswana Pula, and Chinese Yuan after it dumped its national currency at the height of hyperinflation in 2009.
But University of Zimbabwe Professor Ashok Chakravarti and World Bank Zimbabwe’s Crispen Mawadza said besides improving the macro-economic and fiscal environment, adoption of the Rand would benefit the stagnant economy, in a paper titled “Liquidity challenges in Zimbabwe: Turmoil and Tenacity.”
“The simplest way to gain competitiveness in Zimbabwe is to adopt the Rand, it will make our exports competitive and our imports low cost and that will automatically result in the balance of trade becoming much better,” Chakravarti said at an economic symposium.
“It is not the ideal solution; the ideal solution is to have your own national currency. In the absence of having our own national currency, the second best option is the Rand.”
With South Africa as Zimbabwe’s major trading partner, accounting for about 60 percent of trade, Chakravarti said using the Rand was the best way to address the worsening liquidity crunch the country is battling since adoption of multi-currencies.
Already, three other Southern African countries Lesotho, Namibia and Swaziland use the Rand.
Continued use of the greenback, a highly sought after currency, made the country a dumping ground for neighbouring countries, Chakravarti said.
“Because we have adopted the dollar, we have become the source of the US dollar for the whole region and everyone who wants the dollar just comes to Zimbabwe to sell something,” he said.
Chakravarti said the greenback was “a very high cost currency” which made it difficult for Zimbabwean products to compete on the export market.
On the other hand, local companies were reluctant to export as they easily accessed the US dollar locally.
Chakravarti said Zimbabwe must “be serious” in harnessing diaspora remittances by coming up with incentives for people living outside the country to channel funds through formal channels.
The Reserve Bank of Zimbabwe estimated diaspora remittances at over $1.6 billion in 2013.
COMMENTS
What a crock of you-know-what !!!
Doesn’t matter one iota what currency Zim uses if the economy is dead for multiple reasons…..and I won’t bother to list them again……we all know.
Changing the currency ain’t gonna change any of the underlying problems
Actually I have argued in the past that SADCC should adopt a common currency, eliminate travel restrictions and get free flow of goods and services within the region.Eliminate restrictions on investment accross the region. Get the French consultants to build energy nuclear power stations in SA. Kick the Chinese out unless they are willing to invest, not plunder our resources.
Well said George but it will never happen in our lifetime
Be careful chaps the rules are you praise the reporter for their inferior knowledge and opinion or you get moderated its call freedom of expression , that human rights thing that only journalists are allowed to use.
It will be a great, but happy, irony if Mugabe’s misrule were to be the catalyst that brings a single currency for all SADC, and, dare one hope it, a single SADC nation.
We will go down with SA if we join the rand, it can get worse.
In 2000 G8 made an agreement effective 2005. SADC should be deindustrialized and only export raw material and agricultural product on an as and when required. They made attempt to get SA to join SADC but it refused. Crisis Zimbabwe from Pretoria was chosen to disrupt the world cup by stirring un unions which at the time SA resisted. The seed was sown and today via unions G 8 gets what it wanted as SA starts to deindustrialize.Information from alke Friedrichs-Gijrath who researched in Zimbabwe for 3 years and was appointed research economist to the UN- we have no international economic research experts locally.
The idea was that the west could export finished goods that were formally locally manufactured. Zimbabwe amongst other now imports more it was a success. locally and regionally inhabitants will blame their governments.
If you know all this why keep this secret to yourself. tell zanu anc etc etc what the dirty scum of the earth western countries are up to.Refuse their aid and money and start inventing things yourselves.(maybe start at the wheel and then the………….
You can be very good at your so called research but the bottom line is the zimbabwean economy was killed by zanu pf because of their approach to the land issue. Agriculture was the backbone of the zimbabwean economy but it went up in smoke the day we chased the white farmers away.Mr so called apolitical like it or not but that is the truth
Again point of correctuon Mr apolitical South Africa is a sadc member state
so you prefer to go down with America?
Absolute twaddle. You simply do not know what you are rabbiting on about. South Africa has been a key member of SADC since 1995. Do you not remember the endless useless meetings as regards the GNU and its foundation agreement presided over by SADC’s appointed guardian the South African President, firstly Thabo Mbeki (the useless pseudo intellect) and secondly Jacob Zuma (innately and profoundly corrupt).
The S A Government would not agree to that. its not a massive economy that can absorb Zanu’s anomalies. This would mean ,Zuma seriously getting involved in Zim politics, to get rid of the corrupt and ruthless regime. They do not have the stomach for that .
But not G8, that’s whos funding it all = its a shame people cant think beyond Zimbabwe and zanu.
That’s possibly why Zimbabwe is in the position it is, the zim blinkers.
Hands off our Rand as it is not the currency for lunatics and looters. Bad economic decisions will always be bad even if you change currencies. Don’t think by using our ZAR as your own will make any difference.
The US dollar is fine for us. Ask anybody in Harare. They would rather have a dollar than a rand. Those holding rands have taken a knock lately. Now these half cooked turkeys want us to do rands only.
The Rand is going down anyway and we are soon going to have Biliona
ires & Trilionaires in South Africa soon! A Looter Continua!
It will be the worst mistake S Africa has made since majority rule because whatever happens here economically it will affect them squarely.This is why Germany and the rest of Europe panicked when Greece problems started so they had to spend billions of dollars to bail them out to avoid the collapse of the Euro currency.
These so-called economic experts are suggesting something dangerous for S Africa.Once their rand collapses badly S Africa will lose its economic leadership in Africa.This would lead to uncontrollable civil disturbances far worse than the mines strikes etc.
Its useless pretending Zim is sovereign. Its sovereign only on paper. The reality is that Zim has even become far more interwoven with the SA economy since Mugabe’s disastrous economic policies started to unravel. Zim now needs to syncronise its macroeconomic policies with those of SA and adopt the Rand. SA is already controlling the economy through its many companies investments and there are far more Zims working and doing business in SA itself than citizens of any other SADC countries. Lets get real for the sake of our survival!
This is such a load of tosh. for Zimbabwe it does not matter if we have dollars or Rands or 19 accepted currencies , we are uncompetitive because we are uncompetitive. Utilities, Salaries and wages, rents, are too high. Productivity too low, corruption too rife and the corrupt practices cost too much. There is NO reward in being a successful business. Get the government to let go, kill corruption, repeal labour laws and allow people to make and keep their profits, reduce taxes, then we stand chance of making this country we love work. THEN WE CAN BRING IN MINIMUM WAGES and Labour CONDITIONS.
Well said sir. Unlike “Apolitical” who at best could be described as an ill educated unread semi-literate idiot, your comment is succinct and to the point.
This will just be a cosmetic action like conversion from kilograms to pound as a unit of measure of weight. The real issue is addressing inefficiency and corruption. No country has ever become a developed nation or super power without hard work, discipline and application of brains to the problems typically faced by an undeveloped country. The disease to be cured is the belief that progress will be achieved without effort.
The rand will go down with Zuma
One day a shop keeper tried to give me my change in Rands, when I had given him US$’s for my goods, I refused the Rands. That is how popular the Rand is in Zimbabwe.
Let’s wait and see how much the Rand will be worth when ‘Julius the Tendrepreneur’ takes over as president in SA! That counrty is fast becoming Africa….drop the South bit.
@Jake
Must I remind you that Julius is just like any other opposition party leader. He will never rule SA. He will be voted into Parliament by dunder heads like him.
To all of you that only know the going-ons of SA now, the weakening Rand is an economic policy aimed at boosting the competitiveness of our products. It has bee applied numerous times so I’ve noticed that Zimbos are only aware of it now. It yields positive results because exporting to SA will not be worth it for foreign countries but importing SA goods will be more appealing. This policy has been spot-on because we’ve noticed an increase in demand for our products from ZIm,Botswana and Zambia. You now obviously know who benefits.
ha ha ha ha ha ha atleast now you can see how an economy is run.