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RTGS$ is our domestic currency, says Mthuli Ncube

by Staff reporter
17 May 2019 at 17:26hrs | Views
FINANCE minister Mthuli Ncube yesterday told Parliament that his midterm budget statement earmarked for July will be announced in RTGS dollars as opposed to United States dollars which was the currency used to announce this year's national budget.

He said this in the National Assembly while taking questions from MPs on why he named Zimbabwe's currency RTGS$ when worldwide it is known as virtual currency (real time gross settlement).

Mpopoma Pelandaba MP Charles Moyo (MDC Alliance) described the decision as embarrassing.

"My 2019 budget mid term statement will be in RTGS dollars because it is our domestic unit of accounting and we have balances of $9 billion in RTGS, but if you look at the real effect of RTGS to impact on the exchange rate it is less than $1 billion because the rest is stuck in private sector bonds," Ncube said.

"We did mull over a few names for the currency and we thought calling it the RTGS was better because it was already a well-known name and every Zimbabwean knew about it and we thought that we cannot come up with a completely new name which will not confuse people."

Zengeza West MP Job Sikhala (MDC Alliance) then quizzed Ncube over 99-year leases which the Finance minister had claimed were bankable after he liaised with the Bankers' Association of Zimbabwe.

"That they are bankable is mere rhetoric and we have lived with that statement before for a long time. On inflation, the minister gave confusing figures where yesterday he said it was at 66,8%, but I checked today and it is 77,8%, meaning that the minister misled the House and the best thing is for him to resign," Sikhala said.

Ncube insisted that the 99-year leases were bankable and Justice minister Ziyambi Ziyambi also jumped to his rescue, saying Sikhala needed to research more.

"In this country, in the Deeds Registry Act any lease of 10 years or more is bankable and the majority of small-scale farmers, including commercial farmers had bankable leases," Ziyambi said.

He was then asked by Harare West MP Joanna Mamombe (MDC Alliance) to explain the decrease in tobacco sales and how the increase in gross domestic product (GDP) will impact on ordinary Zimbabweans.

"When we revised GDP in US$, it moved GDP from $18 billion to $25 billion. The $42 billion future for GDP is for 2018 and we have revalued what was going on in the last quota where the economy grew by over 6,2% and revalued GDP using the new exchange rate. We estimate that by 2019 in December it will be at $70 billion RTGS," Ncube said.

On the impact on ordinary people Ncube said the surplus is being used to import additional food for both rural and urban areas to provide relief.

"The budget balance from January to March was a surplus of $431,1 million because the target was $78,2 million indicating a major shift in the management of central government," he said.

He said domestic debt in the past three months sat at $9,2 billion down from $9,6 billion in December 2018 representing a $326 million decrease in domestic debt.

"External debt was at US$8,2 billion in March. The bilateral credit is at $5,6 billion and on multilateral credit we owe $2,6 billion as at March 2019," Ncube said.

He said exports during the first quota of 2019 grew by 15% at $886,1 million and were dominated by gold 23%, tobacco 23% and nickel 17%.

Ncube said there was a 33% decrease of imports from $1,7 billion in the first quarter of 2018 to $1,1 billion in the first quarter of 2019.

Source - newsday