Zimbabwe: Bring Back U.S.$ and Ditch RBZ's Failed Auction System - Chamisa

30 April 2022
New Zimbabwe (London)
By Thandiwe Garusa

OPPOSITION Citizens Coalition for Change (CCC) leader Nelson Chamisa, has challenged President Emmerson Mnangagwa's administration to abandon the foreign currency auction system and bring back for full dollarisation.

This comes after the Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, dismissed warnings by the Confederation of Zimbabwe Industries (CZI) that the economy faces a total collapse if government insists on using the rapidly weakening Zimbabwe dollar (Zim dollar).

CZI said the Zim-dollar was on the brink of rejection by the public in the face of exchange instability and increasing inflation.

However, Mangudya criticised CZI, saying instead of removing the Zimdollar, the government is in the process of de-dollarising.

Meanwhile, Chamisa urged the government to fully dollarize.

"The economy is tanking, and Zimbabweans are suffering at the hands of bad leadership, poor governance and porous economic policies," the opposition leader said on Twitter.

"All government policies must be demand driven, inclusive and fully consultative. The recent attack on the CZI position paper by the government is regrettable, and must never be tolerated!"

He added; "Stop the auction system and go for full dollarisation - this will immediately remove distortions, multiple pricing, arbitrage, secure stability and save exporting companies from imminent collapse and help all businesses and economic agents to preserve capital.

"In line with (3), we should immediately work on a de-dollarisation** road map which is inclusive and evidence based and built on consensus, as opposed to command economics and threatening businesses with statutory instruments."

Chamisa added that government should embrace SMART agriculture with a view to foster a more active role of the market and government, providing oversight to minimise distortions caused by agricultural subsidies.

He also said: "To address the economic challenges (such as exchange rate spiral and inflation) caused by short term finance on infrastructure, government must use long term finance, such as diaspora bonds (eg Ethiopia-the Grand Renaissance Dam) and public private partnerships, to fund infrastructure

"Stop corruption and save US$2.8 billion ,being the US$1.8 billion through illicit financial flows and US $1bn wasted in state owned enterprises and line ministries). This money, if saved, is a real game changer. Greedy, indiscipline and corruption stand as the biggest threat to the economy!"

"There is a crisis of confidence in the market, citizens are suffering from the price hikes and deepening poverty level."

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