SW Radio Africa (London)
Lance Guma
2 June 2009
Finance Minister Tendai Biti says the government is weighing up the prospect of using the South African Rand as Zimbabwe's official currency. The country is currently using a system of multiple currencies which resulted in the local currency dying a natural death. Biti says they are exploring 3 different options, including using the Rand, bringing back a redenominated Zimbabwe Dollar or sticking with the current multiple currency system. He said that a decision will be made by the end of the year.
The debate will inevitably center on whether Zimbabwe really wants to surrender its power over monetary policy, interest rates and inflation levels to its neighbour. The flip side of the argument is that this will bring economic stability to a country once plagued by trillion percentage inflation and chronic cash shortages. The current use of multiple currencies pursued by the coalition government has so far brought inflation under control and made previously scarce goods available in shops, but most people cannot afford to buy the goods.
Analyst Bekithemba Mhlanga told Newsreel any formal adoption of the Rand will entail one of two things. Either South Africa will have to lend Zimbabwe significant amounts of its money to kick start the switch, or the country had to earn its own Rands through business transactions. He said there were clear advantages in using the currency as South Africa had interest and exchange rates which were competitive regionally and internationally. Mhlanga cited Botswana as a country that benefited tremendously from allowing the Rand to be used in its economy.
But black market foreign currency dealers have resurfaced following reports that banks are beginning to struggle with a short supply of forex in the system. The street dealers are moving back to reclaim a market they had dominated for years. Even when the forex supply is good Newsreel understands there is still a market for 'cross selling' different currencies. For example banks are said to be offering poor rates for US to Rand conversions while the black market is offering better rates. The dealers are also offering much sought after small change, for high value foreign currency denominations.
With using other people's currencies, comes the risk of fake notes in the system. There are reports that thousands of fake US dollars are circulating in the country. Most shops have invested heavily in devices that can detect forgeries but ordinary people, getting change from informal environments like markets and pubs, are getting the short end of the stick. One dealer told us some Nigerians, Angolans and South Africans in the country were very active in the fake money printing cartels.
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Omugabe - at the risk of repeating myself from another post; your comment about the racist evil west and wonderful friends in the east, has prompted me to ask you a question below. Let's see if you can give an intelligent and reasoned answer.
At the time of Zimbabwe gaining its independence from white minority rule, approximately 15.5 million hectares of arable land were in the hands of white commercial farmers and 16.4m ha were in the hands of black communal and commercial farmers. Since that time, and especially since 1999 onwards, the government has sought to redress this historical… [Read Full Text]
I think that simply because there will not be enough forex in circulation, Biti will be forced to re-introduce the Zim dollar. Unless he can keep the printing press away from Gono, Mugabe will be back in business when that happens.
Criminal Mugabe and his bootlicker Gono must both be tried for having recklessly printed Zim $ thus bringing it to its disrepute. It's an act of cowardness, greed that have brought shame on Zimbos.
Was the last sentence even necessary? it poisoned the thrill of the entire article.
A re denominated currency? thats been tried three time already and look where it's got. Go for the rand as a marker, The south africans would be upset about hat one. The economy of Zim would directly effect the lives of ordinary people in the street of South Africa. Best to use the US dollar. Would the people of Zimbabwe want to be an economic colony of South Africa or the US? I'll let the GNU decide.
Zola it is a pity the citizens are never consulted on anything whether they like it or not they are forced to flow with the tide. relatives of a freind of mine say tht the USD is used more in Harare whereas in Bulawayo it is the Rand or the USD
N/A, Bob never consults the people, he thinks that everyone is stupid except for himself. Yep the zim dollar isn't even worth toilet paper, monopoly money holds more value. Yes the people should be consulted, so in the interets of " African Unity" lets keep it to an african solution and adopt the Rand, but only when the South Africans agree to this. This would help to stop the flow of refugees to SA and will make the whole of Zim a refugee camp. Rhodesia should of become the 6th province of SA in 1920. Now 90 years on Zim… [Read Full Text]
Zim Patriots, take good historical notes; and see that the evil Europeans will never prosper!
The bigoted and beastly brits are reeling from the very corruption, of which they have always slandered Africans.
And the economy of the evil Europeans is in the SAME state of decay that they have criminally imposed on Zimbabwe and other via crippling and criminal sanctions.
Zim Patriots will FOREVER hold the evil Europeans criminally responsible for all the hardship Zimbabweans had to endure, as a result of the crippling and criminal sanctions!
We hail all the Zim Patriots who have maintained African Self-determination and… [Read Full Text]