via ‘Continued USD use threat to growth’ | The Herald December 15, 2015
Finance and Economic Development Minister Patrick Chinamasa yesterday said there was need to craft strategies to address challenges posed by the appreciation of the US dollar against the currencies of the country’s main trading partners, particularly South Africa. Zimbabwe adopted a multi-currency trading regime in 2009, but transactions are carried out mainly using the US dollar.
The use of the US dollar has meant that Zimbabwe has become an attractive export market for most countries, particularly South Africa and China. Foreign products land in Zimbabwe at cheaper prices mainly because of high production costs in the country, rendering local products uncompetitive.
Minister Chinamasa said Zimbabwe needed a strategy on how to survive in the current context, but also highlighted that perhaps it was even time to start “seriously” thinking about a local currency.
“We have to come to terms with the fact that we are a US dollar denominated economy, that we are a mini United States in the centre of countries whose currencies are depreciating almost on a daily basis,” he said.
“Thinking or talking about our own currency is almost like a no go area, it’s almost like a taboo and yet also those are areas that we need to start talking seriously about so that we can see how we can address the issue of the appreciation of the US dollar against our trading partners currencies.”
Centre for Financial Regulation and Inclusion (Cenfri) technical director Hennie Bester said Zimbabwe’s use of the US dollar had worked well at inception but was now militating against economic growth.
“The multi-currency regime worked well from a productive point of view to round about 2012 but thereafter the dollar exchange rate against your primary trade partners declined.
“The US dollar is a double edged sword, it has stabilised your economy but it is killing it at the same time and South Africa is not helping you because the exchange rate of the rand to the dollar is worsening,” he said.
Mr Bester said liquidity challenges being experienced were because Zimbabwe was not receiving much in terms of Foreign Direct Investment whilst the little that was available was being taken out of the country through food, fuel and other imports. — New Ziana.
COMMENTS
Our so called “finance minister” has such a tenuous grasp of economics it is no wonder our economy is a disaster.1) The fall in the Rand should be an advantage to us who now produce nothing and import everything 2)IF Zim is to get back to any kind of manufacturing then THIS IS THE TIME! The strength of the currency we use presently gives us the buying power for spares/equipment/raw materials/needed to get up and running. 3) Government is so busy grasping every dollar it can from the few people who still produce anything THEY ARE THE PROBLEM. When 80% of government expenditure is on salaries (and `13 th cheques, luxury cars and other non essential items) it does not matter WHAT currency you use – you are doomed.
The US$ must stay – it protects us these “PRINT SOMEMORES”…who wrecked our currency in the first place.
We can always use the barter system …. Our whole economy is going back to the dark ages… That is before Cecil John Rhodes time….Thanks to SANCTIONS of course…. LOL
“‘Continued USD use threat to growth’”
Balls
Organised Crime just wants to re-grow the Money Tree and print their own money – again
Indeed, with the present racist mindset, Zimbabwe will fail whatever the currency. Another GONOrrhea like 2008 is waiting.
Better start stashing cooking oil and mealie-meal.
Well said Honourable Minister, the issue of our own currency is one of the many challenges calling for innovative solutions from our generation. Those of us who are loyal and patriotic need to keep on addressing the challenges we face as a country, in spite of all the bickering and negativity that surrounds us. God Bless Zimbabwe.
It is those of us who are patriotic that are brave enough to speak out – are you facing the reality MAMBOSASA that WE HAD our own currency which our politicians literally threw to the dogs.
Do not mistake those of us who criticize our politicians as being people who are not patriotic….it is our very patriotism which forces us to speak out. We are sick of the fools who have destroyed the future of three generations of Zimbabweans. No need for innovation here….just a put a few relatively honest people in charge. It’s not complicated.
The reality is we have challenges to address and my point is the solution is beyond what you call ‘speaking out’ or ‘criticizing politicians’ under the guise of being more patriotic than those who believe in new ideas. I am with you where you insinuate that responsible leadership will take us somewhere for that is exactly the point being made by the Honourable Minister. There is a wrong perception that it all begins and ends with politics, as if politicians operate in a vacuum. At the end of day, politician and non politician we all want clean air to breath, clean water to drink, the sun to rise in the east and set in the west and I believe we are in this together.
This country will never see better times. If you were an investor and you wanted to invest in a company on the stock market what would you do? You would carry out due diligence. Only to find that the CEO is a 92year old sekuru, being helped to scale a single step.
What can such a CEO deliver that history will never have ever captured before? Iri Bwidi iri!
Mambosasa, do not be fooled by these guys words. We are in a mess because these guys have mastered the art of saying the right things and doing the wrong ones. This same fellow when he became finance minister was saying all the things economists and financiers want to hear meanwhile he was taking state funds to build “roads” in his constituency. Go to Makoni East now and you literally can drive on a new road to relieve yourself in the bush. We just need new brooms to sweep our house. That to me at least, is true patriotism, not following the same fellows who created the mess simply because they seat in government – obedience is not patriotism.
I hear you, but you seem to have missed my point. All I am saying is that whatever realistic solution to all our problems calls for concerted effort. My love for my country and my desire to find practical solutions should not be mistaken for anything else.
Yes Well said, lets use Cowrie shells for the next adventure, or maybe mango pips. Going back to the Zim dollar is a nonstarter, the children played with it and broke it. Those Loyal and patriotic really should stand up and say enough of these fools, bring in change, get some youth. Get rid of the dross!!! Till then go back to sleep and dream on.
Ha ha you longing for your goooooooooooooooooooooooooooooooooooooooooònoria!
The lack of competitiveness of Zimbabwe has nothing to do with the US$ and everything to do with misgovernance.
Currently the Zim.economy is on an ART programme specially designed not to contaminate the neighbours and a few neo-economic clowns are howling for the return of the infamous tissue paper (ZimDollar) when even the climatic conditions are not conducive. Is this liberation governance.
The King of Currency will make a come back – Dr. Gono, I presume!
This time they will need to call it a Mugabe Kwacha and it can probably be printed by Softex. On it will be printed “I promise to steal, from the bearer on demand – all that I can.” Softex is very appropriate – because it will be a Soft Ex – not a Hard Ex.
The Mugabe Kwacha will be competing with the old Zim Dollar to acheieve the highest inflation in the world ever. Zimbabwe needs to break another record that it already holds – for looting from those who saved their money, built infrastructure and invested their lives in the country. The more things change, the more things stay the same.