A major economic highlight of the week was the confirmation by the President Emmerson Mnangagwa that Zimbabwe will re-introduce a local currency before year-end. It is our view that our country is not yet ready for the introduction of full-fledged local currency.
This is corroborated by the fact that certain benchmarks that need to be achieved before the local currency can be sustainably introduced in order to anchor the local currency have not yet been attained. These benchmarks include: attaining a sustainable GDP growth rate of at least 7%; low and stable inflation; reducing the high debt ratios to very low and sustainable levels; increasing the level of savings and investments to at least 25% of GDP; reducing the balance-of-payments deficit to less than 5% of GDP; increasing the export level to at least 25% of GDP; high levels of productive capacity; political stability; foreign-currency reserves will also need to be built up to sustainable levels to anchor the Zimbabwe dollar and to defend it in the event of a currency or speculative attack.
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