Zimbabwe: 'Mono Currency to Spur Competitiveness'

Bond notes.
2 August 2019

The return to mono-currency, through the Zimbabwe dollar as the sole legal tender, will spur the country's competitiveness on the export market, according to Foreign Affairs and International Trade Minister Dr Sibusiso Moyo.

This comes as Namibia has become the first country to express willingness to resume buying Zimbabwean goods.

Minister Moyo, who was part of President Mnangagwa's delegation on a three-day state visit to Namibia, revealed this while addressing an exporters' breakfast meeting organised by Zimtrade in Harare yesterday.

Zimbabwe adopted the multi-currency system in 2009 as a measure to curb runaway inflation but, Minister Moyo said the country got too comfortable in it and as a result lost a number of export markets as locally produced goods became less competitive on the international market.

This was occasioned by the fact that Zimbabwe relied heavily on the US Dollar in its multi-currency basket.

"We are very clear that there is no country which has succeeded under an environment of multiple currencies," Minister Moyo told the exporters' breakfast meeting.

"The multiple currency policy is a short term policy to stabilise inflation, but it can never be a long term solution.

"Last week we were in Namibia, we virtually lost almost the whole Namibian (export) market. The statistics which we got were that Namibia is exporting to Zimbabwe about (US$) 22 million worth of goods and Zimbabwe is only exporting (US$) 4 million worth of goods and services.

"But this is a country which we taught systems, which we actually assisted at independence. But when you then juxtapose these two countries and then look at what Zimbabwe is, the story is different. The main objective of this second dispensation is to end this isolation so that you and me can have easy of doing transactions and we can also be able to have lines of credit.

"Because of the multiple currency system, which was there - which had to deal with the hyperinflation of 2008 (and) 2009, finally it stabilised. When we stabilised inflation, we got comfortable and products became expensive to a point that we lost a lot of markets.

"And that is exactly what the Namibians were telling us last week and they were saying 'now that you have adopted a mono currency system, now we can do business. Bring all your horticulture into Namibia, bring all your timber, we don't have timber, bring all different sorts of things," he said.

Speaking at the same event, Confederation of Zimbabwe Industries (CZI) president Mr Henry Ruzvidzo, said there are a lot of positives in the country's macro-economic framework occasioned by the new dispensation, which he said can drive exports again.

"Our scorecard may not look good (currently), it is not easy to see opportunities in the dark however, the fact that we have a room full of exporters and potential exporters is testimony to our incredible spirit of enterprise and survival," said Mr Ruzvidzo.

"The macro-economic transformation that we have seen over the past nine months or so has stabilised things, I think what remains for us now to really start pushing production, start pushing exports (and) really start driving the economy," he said.

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