Business / Economy
Adoption of the dollar has been positive but also challenging: Mthuli Ncube
04 Jul 2011 at 03:42hrs | Views
According to Mthuli Ncube, former Barbican Bank chief and chief economist and vice-president of the African Development Bank the adoption of the US dollar as a base currency in Zimbabwe has been positive but also challenging.
Zimbabwe adopted the US dollar in 2009, following the establishment of a unity government.
Ncube said on Monday morning that, while the dollarisation in Zimbabwe had been positive by stopping inflation "dead in its tracks" and improving growth, it had also increased the cost of doing business and reduced the availability of credit.
"It [dollarisation] has slowed down the availability of credit in the productive sector but, secondly, just made the cost of doing business very high," said Ncube.
"But I guess that's the pain that needs to be undertaken in order to get things straightened out there," he added.
The African Development Bank forecast Zimbabwe's growth at about 8% for 2011.
Zimbabwe adopted the US dollar in 2009, following the establishment of a unity government.
Ncube said on Monday morning that, while the dollarisation in Zimbabwe had been positive by stopping inflation "dead in its tracks" and improving growth, it had also increased the cost of doing business and reduced the availability of credit.
"It [dollarisation] has slowed down the availability of credit in the productive sector but, secondly, just made the cost of doing business very high," said Ncube.
"But I guess that's the pain that needs to be undertaken in order to get things straightened out there," he added.
The African Development Bank forecast Zimbabwe's growth at about 8% for 2011.
Source - i-net Bridge
