News / Local
Zimbabwe will not dollarise, says Prof Ncube
25 Feb 2022 at 05:42hrs | Views
GOVERNMENT has reiterated that it will not dollarise the economy, brushing off demands from various sectors for it to do so in the face of the weakening local currency.
Zimbabwe re-introduced its own currency in 2019 after a decade-long hiatus and put in place a five-year de-dollarisation roadmap, detailing how the economy would transition over the period.
The roadmap, among other things, permits the continued use of the US-dollar and other foreign currencies over the transitional period.
But, because of the US dollar dominance and preference in the local market, there is resistance to the Zimbabwe dollar, while pricing based on parallel market exchange rates have led to sharp increases in the cost of goods and services pegged in local currency.
This has led to calls for full dollarisation. But Finance and Economic Development Minister Mthuli Ncube told Parliament yesterday that Government was still pursuing de-dollarisation.
"I want to be clear, we are not US dollarising. We will not US-dollarise. US dollarisation is a very bad idea.
The reason why our industry is performing well, the (capacity) utilisation is up there . . . it's because we have a domestic currency," he said.
"It has made our economy competitive; we cannot use the US dollar as a sole currency. That will be a very bad idea indeed."
Minister Ncube expressed confidence that monetary policies announced recently will help promote the use of the local currency.
The measures include paying more taxes in local currency by mining companies which previously settled the bills in foreign currency.
Minister Ncube said the Financial Intelligence Unit would hire more staff to enforce compliance of the monetary measures.
"Now, coming to those who are breaking laws and not pricing their goods at the auction rate, we have a Financial Intelligence Unit.
If they are stretched, we are supporting them in hiring more personnel so that they can get to those rural areas where the Hon. Member mentioned to enforce the law in terms of compliance," he said.
"You will see in the last few weeks, a few people and a few companies being mentioned in the media that have been fined for using the black-market rate in the pricing of their goods.
"This is hurting our ordinary citizens. As Government, we are aware of this," said Minister Ncube.
Zimbabwe re-introduced its own currency in 2019 after a decade-long hiatus and put in place a five-year de-dollarisation roadmap, detailing how the economy would transition over the period.
The roadmap, among other things, permits the continued use of the US-dollar and other foreign currencies over the transitional period.
But, because of the US dollar dominance and preference in the local market, there is resistance to the Zimbabwe dollar, while pricing based on parallel market exchange rates have led to sharp increases in the cost of goods and services pegged in local currency.
This has led to calls for full dollarisation. But Finance and Economic Development Minister Mthuli Ncube told Parliament yesterday that Government was still pursuing de-dollarisation.
"I want to be clear, we are not US dollarising. We will not US-dollarise. US dollarisation is a very bad idea.
The reason why our industry is performing well, the (capacity) utilisation is up there . . . it's because we have a domestic currency," he said.
"It has made our economy competitive; we cannot use the US dollar as a sole currency. That will be a very bad idea indeed."
Minister Ncube expressed confidence that monetary policies announced recently will help promote the use of the local currency.
The measures include paying more taxes in local currency by mining companies which previously settled the bills in foreign currency.
Minister Ncube said the Financial Intelligence Unit would hire more staff to enforce compliance of the monetary measures.
"Now, coming to those who are breaking laws and not pricing their goods at the auction rate, we have a Financial Intelligence Unit.
If they are stretched, we are supporting them in hiring more personnel so that they can get to those rural areas where the Hon. Member mentioned to enforce the law in terms of compliance," he said.
"You will see in the last few weeks, a few people and a few companies being mentioned in the media that have been fined for using the black-market rate in the pricing of their goods.
"This is hurting our ordinary citizens. As Government, we are aware of this," said Minister Ncube.
Source - New Ziana
