MDC Vice President and former Finance Minister Tendai Biti says Mnangagwa’s government should swallow its pride and embrace the US dollar again, adding that the local currency issue must only be looked into once productivity in farms, mines, tourism and other sectors has peaked.
The government last week announced it will print more cash to increase liquidity.
The Reserve Bank of Zimbabwe said it would introduce a ZW$2 coin and ZW$2 and ZW$5 notes this month to “boost the domestic availability of cash for transactional purposes through a gradual increase in cash supply over the next six months”.
Finance and Economic Development Minister Mthuli Ncube insists this is just a cash injection, rather than the introduction of yet another currency.
Movement for Democratic Change vice president and Harare East MP Tendai Biti says the government should focus on supporting productivity rather than changing currencies.
“Productivity is key — importantly, productivity on the farms,” he says. “We have to deal with the enablers of productivity, which include electricity and access to forex.”
Biti says he believes the government should swallow its pride and embrace the US dollar again.
But it’s a move President Emmerson Mnangagwa and Ncube have resisted, despite calls by civil servants and striking doctors to be paid in foreign currency.
But Joseph Busha, a local businessman and leader of the opposition FreeZim Congress, is not also convinced by Ncube’s latest move.
“When RTGS$ was introduced, it was supposed to increase liquidity. Then came bond notes, and again our liquidity issues [were] not resolved,” Busha says.
“The new currency they want to introduce — I don’t think it will solve anything because it is not backed by production.”
Ncube has argued that increased production will flow from policy reforms. He insists that a “conversion of short-dated treasury bills into long-dated savings bonds”, issuing of savings bonds, the “use of statutory reserves and cash-backed letters of credit”, and regulating speculative activity in the forex market will support the domestic currency and make local producers competitive.
-Online