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'No US dollar comeback'

by Staff reporter
05 Mar 2022 at 08:14hrs | Views
Government will not re-dollarise the economy because it's not possible to grow it riding on other economies currencies, Finance and Economic Development Minister, Professor Mthuli Ncube said yesterday.

Despite calls by the business community, civil servants, and ordinary citizens to do so, Prof Ncube said Zimbabwe will not adopt the US dollar as the country's sole currency.

He said measures will be put in place to defend the value of the local currency.

This comes amid exchange rate volatility on the parallel market, where rates have doubled the official Reserve Bank of Zimbabwe's (RBZ) auction market exchange rate.

Zimbabwe adopted the greenback in February 2009, which partly led to higher production costs and stiff competition from regional countries whose products were being imported into the country at a lower cost.

Exports were also rendered uncompetitive as they competed with products from countries that manufactured using softer currencies like the South African rand and Botswana's pula.

Addressing youths drawn from tertiary colleges in Gweru during a youth symposium organised by the Zanu-PF Midlands province leadership held at Mkoba Teachers' College in Gweru yesterday, Prof Ncube said Zimbabwe cannot use other people's currency to develop its economy.

"In 2019 we re-introduced the Zimbabwean dollar because you cannot develop the economy without your own currency. It's not possible to develop our economy using other people's currency and therefore we need our own local currency in electronic form which is RTGS and the paper form," he said.

Prof Ncube said focus should be on making sure that the US dollar does not dominate the local economy.

He said the Zimbabwe dollar was doing well to spur local manufacturing industry as evidenced by the fact that 70 percent of products on shelves in shops are local products.

"Manufacturing industry has been doing well under the local currency. So, the local currency is supporting the local industry because now we have 70 percent of all products on shelves in shops being locally made. Local products are filling our shelves. I am not saying they are cheap but they are contributing to import substitution and job creation," he said.

Prof Ncube said when the Zimbabwean dollar was reintroduced people lost savings.

"When we did that, we realised that people lost their savings. Pensioners lost their money and so we made a decision to compensate pensioners.

Two weeks ago, we started the process of paying pensioners US$100 for losses they made in 2019 when we introduced currency reforms back then. We also called on individual depositors to come to claim their money but however they have been slow to show up. So, show up so that we are able to compensate you," he said.

The symposium which ran under the theme, "Impact of Sanctions on the economy" saw Prof Ncube explaining to youths that the economy of the country could have been on a better standing if it wasn't for the illegally imposed sanctions by Britain and her allies.

Prof Ncube said the Second Republic has been putting in place reforms to mitigate against the sanctions which have affected the growth of the country forcing the country to consider dollarisation.

"The Government developed the Transitional Stabilisation Programme (TSP) to guide the reform process during the period 2018 to 2020.

Significant progress was made in the implementation of the TSP across its various pillars. The next steps towards attaining the objectives of Vision 2030 is being guided by the National Development Strategy 1 (NDS 1) as the country marches towards achieving an upper middle-income society by 2030," said Prof Ncube.

He said there are 14 areas being focused on under NDS 1, such as value addition and supporting the digital economy.

"We want to support that digital economy because Covid-19 has taught us to go digital for the growth of the economy. We want to ensure food security and make sure the environment is protected. Health is also critical for the growth of the economy, housing delivery and access to decent accommodation," said Prof Ncube.

In areas such as food security and engagement and re-engagement, he said the Second Republic decided to compensate the white commercial farmers who lost land to the previously marginalised Zimbabwean but only for improvements made on the land.

Prof Ncube encouraged the youths to come up with business ideas and get funding from the Government.

"Government has put in place mechanisms for youth empowerment and it's up to you to approach the Government for funding. We are supporting youths in mining, youths in farming and those with technology ideas can go to any innovation hubs in the State universities to develop them.

If you want to go into farming, youths have 10percent of the land in provinces and they can also consider getting into business partnerships or ventures and take farming as a business. We want you to be part of Vision 2030," he said.

Source - The Chronicle