via Biti wants rand to replace US dollar – NewsDay Zimbabwe July 24, 2014 by Paidamoyo Muzulu
RENEWAL Team interim secretary-general and former Finance minister Tendai Biti yesterday called on the government to disband the use of the US dollar (US$) as the official base currency and officially adopt the softer South African rand (SAR) to stimulate economic activity.
Biti made the remarks while giving his party’s state of the economy address where he said that the country had to take decisive action to stem the current economic meltdown.
“We agree the issue of the US$ needs revisiting, but that does not mean the return of the Zimbabwe dollar. We propose US$ should be devalued by bringing in the rand as the official currency and joining the Rand Monetary Union,” Biti said.
His remarks came shortly after Finance minister Patrick Chinamasa admitted that dollarisation had caused distortion in the economy.
“Let’s find some consensus on the economy and differ only on the operational issues,” Biti said.
He said the Renewal Team was proposing a “third way” of dealing with Zimbabwe’s economic problems through a 16-point plan.
“Among other things the 16-point plan includes convening of an all-stakeholders dialogue on the economy, immediate leveraging of Zimbabwe’s resources in the mining sector and addressing Zimbabwe’s debt question and the execution of a home-grown brewed debt programme, ZAADS,” Biti said.
He also proposed that the government should unconditionally re-engage the international community, dialogue with multilateral financial institutions like the African Development Bank, Africa Import Export Bank, PTA Bank and the Development Bank of Southern Africa and repeal the Indigenisation and Empowerment Act to unlock cash inflows.
Biti said these would allow the issue of a $2 billion international bond that will be directed as an immediate stimulus for Zimbabwe.
He said in place of the Indigenisation Act, the government should articulate “an alternative broad-based empowerment and upliftment model that is transparent, fair and just as envisaged in Article 14 of the Zimbabwe Constitution”.
COMMENTS
My opinion is that any one of the BRICS currencies might be able to do the trick. Of course, fiscal discipline is always the foundation.
There can never be fiscal discipline that was the problem with the zim dollar and you can never have thieves and muderers in charge of the countries money.please don’t make us adopt the rand which is a currency on the same slippery as the ZANU dollar and we don’t want to be trillion airs again
Whatever is the “NAME” of the currency, as long as ZANU PF is ruling, nothing , Yes, NOTHING will work out in Zimbabwe. The solution is for all people to stop working till the MORONS GO! You vote: They RIG! You go hungry: They FEAST! You Cry: They REJOICE. Zanu PF must JUST GO. For them to go, I propose this: Nurses, Teachers, Police, CIDs, CIOs and all GOVERNMENT workers should just stop going to work and YES, ZANU PF will GO. We do not demonstrate, we just STAY at home.
What a pity you do not understand the linkage between inflation, trade balances and the currency of trade.
This is what we need of you Biti other than petty personal attacks on your opponents.Be principled,focused and never respond to vitriol or animus attacks.Prove yourself constructively for Zimbabwe beyond the confinements of Tswangirai’s tepid leadership that you claim to have liberated yourself from.Only your wits can win a bemused electorate at this juncture.
THAT VERY TRU WE NEED PPLE WITH SOLUTIONS .WELL DONE BITI
corruption must be uprooted first
If smart investors wont send USD into Zimbabwe why does Biti think South AFrican investors will send in Rands – those Boers are like the people who hold USD also not fools !
Also you cannot fool the many millions of ex Zimboes in the diaspora who will not be fooled a second time around
Hey ‘biggus dickus’ what with the racist comment when we are discussing financial matters?
my apolgies if i offended you ‘saddened’ – how should i refer to the boer war then – i thought many s africans actually liked the word boer
aplogies
The question of Pegging to a particular currency is missing the issue entirely. It’s about sound fiscal policy and management else really moving the problem not resolving it.
Biggus Dickus, the Afrikaners or “Boere” as you refer to them constitute about 2,5m people in South Africa a country of 50m people. Contrary to your opinion they do not and have never controlled the commanding heights of the South African economy. Hence your statement is stupid and racist.
It does not matter if you bring a currency from Mars. The currency is not the problem. Tendayi should know that. The problem is that Zanu pf has got it’s dirty finger in every pie and all the pies get contaminated. In other words if we had a Government that was not as corrupt as Zanu pf the Zimbabwe dollar would be back in double quick time. You could discover 20 tons of gold lying above ground it would make no difference as long as Zanu is Power. It could rain cats dogs and diamonds (which it has already) it would still would note make a difference. If a river suddenly sprouted flowing with oil and diesel it would make no difference. They had it all in their hands and what did they do? Destroyed it (a wealthy country) They are destroyers simple and straight forward.
Goood one Doc! That is exactly right!
Currency from Mars. Ha ha I like that.good one Doc!
While i applaud the attention on the deteriorating economic situation trying to jump to the RAND with a belief of benefiting a weaker is not viable in the long term. What is required now is an immediate impetus towards raising national productivity levels. A starting point is exporting iron while parties to the Zsico deal are still dilly dallying, restart operations at shabanie giving it back to the rightful owners and of cause do away with the Indigenisation policy, it has never and will never work.
US dollar not the problem. Mismanagement, dishonesty, corruption, policies are the causes of meltdown. Forex in whatever denomination belongs to the people who earn it. It does not belong to govt. Govt is capable of earning its own forex – if it refuses to manage its budget, refuses to expand the tax net to address the informal sector, refuses to operate efficient tax collection, refuses to address corruption it must live with the consequences. It is the architect of its own mischief. Go away, and as another wise communicant once said let business do business, farmers farm, teachers teach. Good govt is a facilitator not a tyrant.
I can never understand why Politicians can be so dense. They have the answer staring them in the face but they continue with their tunnel vision. Even the land issue. Some of those that were supposed to be beneficiaries have tried to go into partnership with the old farmers, what happens?Enter Mugabe and he closes the door. Others try to open new businesses and employ people, enter Mugabe and closes the door (indeginisation).Their way is not working but they try to force matters.As long as the roads visiting dignitaries are repaired the country is good. As long as I can fly out of the country for my medical the country is good. Work for me. I don’t know when you will be paid but don’t forget you are employed.Oh you have no bus fare? Find your own way. I want you at work.If you don’t come you’re fired. It’s a crazy situation.
Excellent suggestion Biti. I have always argued for the joining of the Rand Monetary Area; but alas, some claim Zim will become the tenth province of South Africa. Better it becomes an extension of America. The usual black people’s self hate!!
Excellent suggestion Biti. It is good that you are now clear where you stand exactly. Must be a relief to finally show that you can be led by a tribe you say you so dislike. Funny how politics go.
Joining the Rand Monetary Area is an excellent idea.
It will require the government to have fiscal discipline and to balance its budget.
It will free up the movement of goods and services in the region and reduce costly delays at our borders.
It will remove the impact of currency fluctuations that are hurting Zimbabwe as the US$ strengthens against the rand.
It is in line with the larger goal of regional economic groupings such as SADC, and also in line with Pan African integration.
Though entirely unintended, it will the single positive economic achievement of the Zanu PF government in 34 years.
You are confused. Maybe you are thinking of the customs union
Fiscal discipline from ZANU?
That’s got to be a joke.
Doctor do little has said it, as long as we have a ZANU running the show, nothing much is going to change.
A real dollar is better than a rand. What fool would try and make believe otherwise?
When the rand devalues against the dollar (as it has done massively over the last year), what do you think happens to local business? They are paying USD wages, and USDs for their inputs, so they simply become uncompetitive and eventually go bust.
It is not sustainable for Zimbabwe to be paying 40% higher wages than south africa simply because we are tied to a stronger currency. Everything will be imported because we cannot afford to manufacture anything locally!
It is, in fact, imperative that we link our currency to the Rand, or there will be no business left in this country.
Good idea Biti!
Well said doc do little. Biti has no idea what he talking about. Perhaps he asked his fellow lawyers Chinamasa for ideas on what to say. there is a similarity in what the two have said of late. The South african rand has been sliding like goodness for the past years. If we assume that it continues that trend for the next five years then what you get in hyper -inflation. It is inflation that the South African trade unions will not sit idle and wait for. So you can almost foresee social unrest there. Then what follows is another Zimbabwe.
I was of the opinion that the USD is more stable than the rand. For once the prices are stable for a long time.
The Rand is going the same way as the Zim
Dollar went; and it will weaken as SA economy weakens because of mismanagement, corruption bad policies, labour unrest. Joining a sinking ship is not the answer. Look rather at the Zambian model which in march this year reverted to free exchange.
You are probably right. The ANC have turned out to be much like ZANU PF. They are corrupt to the core, and just as the Zimbabwean “lumpen proletariat” have failed to hold ZANU PF to account since corruption emerged in the late 1980s, nor have the South African “lumpen proletariat” are failing to hold the ANC to account.
I have to agree with you 100%. the Rand is an unstable currency based on volatile resources and commodities prices, it is almost always in SA’s favour to devalue their currency to enhance their exports, that coupled with economic uncertainty caused by crippling industrial action which has become a part of daily life in South Africa and the glaring corruption in SA makes the Rand very unsuitable, price stability is critical in a low income economy like ours we can not afford the fluctuation in prices which a weak Rand will cause. Businesses in Zimbabwe would not miss a chance to increase prices and any change in the Rand will be more than enough justification for them
When Chinamasa decided (well, actually, was compelled) to dollarise in 2009 ( result of rank and file unrest in the army and anyway the law Of the day was wrong) Govt had an opportunity to bring in soft-touch wage, rent and price control through consultation. Instead RBZ issued a badly worded directive allowing export of large amts of money without question. Why? Because a modicum of soft touch regulation would have created a quietly confident economy that could have been even more successful than GNU despite ZPFs attempts to undermine it? Well, Minister,
now you’re hoist by your own petard. Mr Biti if goods are priced in rands most people will still pay in Us dollars – the bulk of our forex income is from the overseas diaspora. So what is the point? Encourage multicurrency systems but never again force people to surrender forex they earn in exchange for local currency, respect for which has been totally destroyed through past cynical manipulation for political ends.
Who is he?
Biti is confused. our problem is the huge debt and the 51percent policy We do not repay loans.macomrades haabhadhari zvikwereti so no one wants to advance us e revival package.Running an economy is like running a business.Even if we adopt the rand investors will still check our creditworthiness and investment policies.it will be worse because almost all investors prefer their returns in $us.
Now you are an ordinary person like anybody else.Let those with forces or winds of change offer suggestions .You were minister for many years but you never said anything.You advocated for the USD now you are a nonentity you want to open your mouth.Keep quiet
The problem of Zimbabwe is ZANU PF. In deed and in thought.
The US$ is stronger than the Rand, who therefore will chose what is weak? If we continue to use the US$ we will not need to apply for foreign exchange at the Reserve Bank or other commercial banks. We are doing fine with the US Dollar. Chinamasa wants to see us go down the old way of the Zimbabwe dollar. ZANU does not want progress, the US$ way is progress. We will never sink with this currency because we can leave Zimbabwe at will with the US dollar. What could be better for a people who are now used to running away from Zimbabwe.
Only on this issue i will support Biti purely from an economic point of view. Its true at times you have to take advantage of your “successful” neighbors , in this case South Africa , take for instance Namibia. Far afield we have the likes of Mexico and most Caribbean Countries , which are where they are today because of USA simple.
@Charakupa maybe it is not visible to all but South Africa has their own problems. Any connection we have with them at the moment benefits them and them only. Some one suggested that it is better to be another province of South Africa. I do not agree. Zimbabwe must come out of this on it’s own. When the right people are in place we have to do it by ourselves. The chosen currency to carry the job through must be a tool we use and only that. Our people have the capacity to take us out of this if given a chance. That’s all that is required. A chance.In stead of talking about replacing currencies how about campaigning for the conditions that would save the likes of Bulawayo from the collapse the City finds it’s self in. How about the street kids in the streets of Bulawayo and Harare. How about the senior citizens. How about the Hospitals with no Medicines. Wrong priorities makes JACK A DULL BOY.
The word is that the Rand is going the way of the Zim dollar.
A few yrs back(4 in fact), one could get 11 rand to one’s pound sterling, now its almost 20!
Only a fool would want to adopt such a currency.
Great stuff, again Doc do little.
Zumaland is not a serious BRIC. The new Zambia kwacha is a better bet appreciating. While village idiot. Mbeki sent the rand into a free fall fast gathering momentum. Zumaland is collapsing like mugabeland. Soon Namibia Botswana will revert to their own after abandoning a weakening rand. Its not the currency. Its the caliber of incumbent regime