News / National
'Zimbabwe may be forced to reintroduce Zim dollar'
10 Mar 2014 at 10:08hrs | Views
The liquidity crunch haunting the economy might force government to consider reintroducing the Zimbabwean dollar to fund both the national budget and the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset), an economist has claimed.
Speaking in Bulawayo, on Friday, during a human rights indaba organised by the ZimRights under the theme "Together Towards Socio Economic Justice", Public Policy and Governance program Manager at the Institute for a Democratic Alternative for Zimbabwe (IDAZIM) Jabusile Shumba said about $4 billion dollars was needed to fund this year's national budget and $27 billion was required to finance ZimAsset.
"The only way that government might think of solving this is to re-introduce the Zimbabwean dollar but the problem is that the market is likely to resist use of the Zimbabwean dollar as an official currency," said Shumba.
The country's local currency was ditched in 2009, after it was rendered useless by hyperinflation which peaked at 231 million percent, in favour of a basket of multiple currencies that includes the United States dollar, South African rand and the Botswana.
Shumba said it was pointless for the country as stated in its economic blue-print to look at Brazil, Russia, India, China and South Africa (BRICS) for funds to assist in financing ZimAsset and its budget this year, as the countries were facing their own problems.
"Zimbabwe should not expect BRICS to fund its economic recovery and ZimAsset agenda and it should not look to international and multilateral finance institutions for funding as these countries are facing several problems of their own," he said.
ZimAsset was recently adopted to spearhead the turnaround and development of the economy in the next five years.
Shumba said there was need for civil society to aid government efforts illuminated in the ZimAsset document and ensure that policy discrepancies were ironed out so as to contribute to the resuscitation of the country's economy.
"The government's targets are unrealistic and the ZimAsset is doomed to fail unless a miracle happens because of several inconsistencies and contradictions within the blueprint. Therefore, we need to assist the government in coming up with strategies that will ensure economic recovery," he said.
In order to ensure that the ZimAsset is fully funded financing mechanisms such as tax and non-tax revenue, leveraging resources, Sovereign Wealth Fund, issuance of bonds, accelerated implementation of Public Private Partnerships, securitization of remittances, re-engagement with the international and multilateral finance institutions and other financing options, focusing on BRICS, were considered in the blue-print.
"The $4,1 billion that was set aside in the national budget is insufficient compared to the $27 billion that is required for the blueprint to fully function. Besides, realistically, we do not have the $4 billion. This just means that we continue to have blueprints that are not implemented," said Shumba.
Government has however, in the recent past, maintained that it was not bringing the Zimbabwe dollar back any time soon.
Speaking in Bulawayo, on Friday, during a human rights indaba organised by the ZimRights under the theme "Together Towards Socio Economic Justice", Public Policy and Governance program Manager at the Institute for a Democratic Alternative for Zimbabwe (IDAZIM) Jabusile Shumba said about $4 billion dollars was needed to fund this year's national budget and $27 billion was required to finance ZimAsset.
"The only way that government might think of solving this is to re-introduce the Zimbabwean dollar but the problem is that the market is likely to resist use of the Zimbabwean dollar as an official currency," said Shumba.
The country's local currency was ditched in 2009, after it was rendered useless by hyperinflation which peaked at 231 million percent, in favour of a basket of multiple currencies that includes the United States dollar, South African rand and the Botswana.
Shumba said it was pointless for the country as stated in its economic blue-print to look at Brazil, Russia, India, China and South Africa (BRICS) for funds to assist in financing ZimAsset and its budget this year, as the countries were facing their own problems.
"Zimbabwe should not expect BRICS to fund its economic recovery and ZimAsset agenda and it should not look to international and multilateral finance institutions for funding as these countries are facing several problems of their own," he said.
ZimAsset was recently adopted to spearhead the turnaround and development of the economy in the next five years.
Shumba said there was need for civil society to aid government efforts illuminated in the ZimAsset document and ensure that policy discrepancies were ironed out so as to contribute to the resuscitation of the country's economy.
"The government's targets are unrealistic and the ZimAsset is doomed to fail unless a miracle happens because of several inconsistencies and contradictions within the blueprint. Therefore, we need to assist the government in coming up with strategies that will ensure economic recovery," he said.
In order to ensure that the ZimAsset is fully funded financing mechanisms such as tax and non-tax revenue, leveraging resources, Sovereign Wealth Fund, issuance of bonds, accelerated implementation of Public Private Partnerships, securitization of remittances, re-engagement with the international and multilateral finance institutions and other financing options, focusing on BRICS, were considered in the blue-print.
"The $4,1 billion that was set aside in the national budget is insufficient compared to the $27 billion that is required for the blueprint to fully function. Besides, realistically, we do not have the $4 billion. This just means that we continue to have blueprints that are not implemented," said Shumba.
Government has however, in the recent past, maintained that it was not bringing the Zimbabwe dollar back any time soon.
Source - zimmail
