ZANU PF has resolved to reintroduce the redundant Zimbabwe dollar (Zimdollar) to run alongside the multi-currency regime in order to resolve the liquidity challenges besetting the country. REPORT BY EVERSON MUSHAVA CHIEF REPORTER
According to a list of resolutions passed at the just-ended 13th Zanu PF national people’s conference, the party said it would lobby for the reintroduction of the valueless Zimdollar, arguing the current liquidity crunch was exacerbated by lack of a local currency.
“The party would instruct the government to work out modalities for the reintroduction of domestic currency alongside the multi-currency system in order to address the current liquidity crisis and to enable our people to carry out their transactions,” the resolution read in part.
The party resolved to allow other currencies from five newly industrialised countries Brazil, Russia, India, China and South Africa (BRICS) as legal tenders in Zimbabwe, alongside the US dollar to facilitate trade.
Zimbabwe introduced the multi-currency regime in 2009 to stop a runaway inflation following a decade-long economic meltdown that saw the country recording the world’s highest month-on-month inflation of over 80 billion percent.
However, Zanu PF has been repeatedly calling for the reintroduction of the valueless currency to allow transaction in rural areas with difficulties in accessing multi-currency.
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The conference which proposed a cocktail of measures to safeguard Zimbabwe’s industry — particularly mining from foreign exploitation and externalisation of funds — also resolved to “spearhead the adoption of currencies of the BRICS countries (Brazil, Russia, India, China, South Africa) and other emerging economies as legal tender in Zimbabwe alongside the US dollar.”
However, the MDC-T yesterday rubbished Zanu PF’s Zimdollar push saying it was a populist idea likely to reverse all economic gains achieved so far.
“The country will be taken back to the 2008 era. Zimbabwe is not yet ready for the Zimdollar,” MDC-T spokesperson Douglas Mwonzora said.
Economic analyst Christopher Mugaga yesterday said reintroducing the Zimdollar was tantamount to committing economic suicide.
“The Zimdollar (proposal) will die a natural death. It will be wastage of resources. Zimbabwe is not yet ready for a local currency, not at the moment, not even in two years.”
Mugaga said the rift in the country’s politics of the country will not allow any other currency to survive except the US dollar which was more liquid.
“Calling for the reintroduction of the Zimdollar now is a political gimmick ahead of elections. It’s not feasible.” Another economic analyst Emmanuel Mugadza said while the idea could be good, the country was not ready to accept its currency.
“The people cannot trust it now,” Mugadza said. “Considering the politics of the day, the government will end up printing money to finance its activities and that will fuel inflation. We are a net importer and the economic fundamental of our country cannot sustain a local currency.”