By Paul Nyathi|Opposition MDC Alliance has called on the government to immediately dump the crumbling Bond Note and adopt the South African Rand as the major currency in the country.
The opposition party’s shadow Minister Of Finance Cephas Mashakada tabled the proposal in a long factual presentation in the House of Assembly on Tuesday.
Below is the extract of Mashakada’s argument for the removal of the Bond Notes.
The other thing is currency reforms. Mr. Speaker Sir, I still believe that the exchange rate is still 1:1. The Minister, when he was at Chatham House in London, said that no, the bond note is not equal to the United States dollar. What is it? We all know that it is 1:1. What we need in this country are currency reforms. You need to choose a currency in the basket which is commonly available and in this case I propose that we adopt the Rand as our current. I will give reasons for that. Sixty percent of our imports come from South Africa. Whether it is fuel, food, medicines, capital or intermediary goods, they all come from South Africa. We go to South Africa and we buy in Rands and what people are now doing, if they buy something for R20 the price here is $20. I buy something for R100; I sell it for $100 here. That is causing a lot of inflation, yet we are buying these things in Rands.
So, I propose that why not price our products in the shops in Rands because it is in wider circulation, so you will not waste a lot of foreign currency buying things from South Africa. You would use your United States dollars to buy products that are denominated in foreign currency for imports, for example machinery from Germany, you have to buy in foreign currency, chemicals from America, you use foreign currency, but basic commodities that you buy using the Rand, price them using the Rand. There will not be any opportunity for price arbitration as I have told you; marking your product price from R100 to US$100 is usurious. I therefore propose that we adopt the Rand as an anchor in our currencies basket. Its supply is cheap. Instead of using the few American Dollars that we have to import United States Dollars, let us use that money to import the Rand. At the end of the day, maybe three million Zimbabweans in the diaspora – may be two million in South Africa – imagine if they send the Rand home since that will be the dominant currency in the basket instead of the United States Dollar which is a difficult currency dominating our currency basket.
As the opposition, we are demanding that we join the Rand Monetary Union area. Of course, there are some obligations linked to that move.