Opinion / Columnist
Rand adoption calls: Biti seeking relevance
30 Oct 2017 at 07:41hrs | Views
This week People's Democratic Party (PDP) leader, Tendai Biti presented what he termed the state of the economy address at his offices in Harare. One of the issues that he raised was the proposed adoption of the South African Rand as Zimbabwe's anchor currency in the hope of bringing economic stability and growth. This is in spite of Government's unequivocal position, through the Reserve Bank of Zimbabwe (RBZ), on the matter that it would not adopt the currency.
This is not the first time that the opposition has advocated for the adoption of the South African currency. In April 2017 the MDC-T's so-called shadow Minister of Finance and Economic Development, Tapiwa Mashakada, made the same suggestion justifying the calls by stressing that 50 to 60 percent of Zimbabwe's foreign trade was with its southern neighbour. Mashakada, however admitted that Zimbabwe could only adopt the Rand if she had her own currency. He highlighted that the economic conditions which are conducive for the country to re-introduce its own currency were not yet ripe.
Around the same time, Biti also tweeted that, "Too late to adopt (the) Rand. Economy (is) now in so much disequilibrium (that) without reforms, ZANU PF will bastardise the Rand." This is the same Biti who has been "converted" and now fervently believes that the adoption of the Rand is now an urgent matter, whether ZANU PF is in power or not. When it suits him ZANU PF is the hindrance to the adoption of the Rand and when it does not, in a chameleon-like fashion, he calls all the media houses in Harare to tell them that the adoption of the Rand is now a matter of life and death. This time around he conveniently omitted to mention his earlier ZANU PF condition.
When a whole opposition party leader forgets about crafting life-changing policies and programmes ahead of a major election and opts to major in matters of a Government Ministry which he once presided over years back, one is reminded of the rich ChiShona sagely wisdom which was dispensed in proverbs and idioms such as "Matakadya kare haanyaradze mwana" (Recalling past times of plenty cannot be used to cure present day hunger). Biti's statement killed two birds with one stone. It indulged his thirst for the bygone days when he presided over the Finance Ministry, which he obviously misses, and the need to continuously appear politically relevant. What with a splinter group from his party having tried to kick him out of the political outfit which he founded.
Biti and his ranting aside, does Zimbabwe really need to adopt the Rand? The answer is an emphatic, no. First and foremost, the Rand is already part of the basket of foreign currencies which the country adopted in February 2009 as part of the implementation of that year's National Budget, which the then Minister of Finance and Economic Development, Patrick Chinamasa presented in late 2008. Prior to this hullabaloo, the Rand was being used in Zimbabwe without any issue especially in the southern region of the country. Until the introduction of the bond coins by the RBZ to increase the availability of loose coins on the market in 2014, Rand coins were the main source of loose change in Zimbabwe and they only fell out of favour with members of the public due to exchange rate differences with the bond coins.
Adopting the Rand is being erroneously assumed to be a silver bullet to Zimbabwe's liquidity challenges. What the country needs are initiatives which its manufacturing sector to significantly increase production levels, stimulate exports and reduce the prevailing high dependence on imports. There is need to address economic fundamentals to reduce the cost of production and to reduce production costs which would increase the demand for local goods. Reduced production costs also make Zimbabwe's exports on both the regional and global markets.
South Africa has its own economic challenges. It is currently battling with the effects of the downgrading of its credit rating by global rating agencies Standard and Poor and Moody's early this year, which reduced the southern African country's economy to junk status. The country is also struggling with common issues such as poorly performing state-owned enterprises among other challenges and this hardly makes it a role model for Zimbabwe.
Instead of Biti and ilk in the opposition camp playing the armchair economic critics, they should roll up their sleeves and ready themselves to work hard for the country's economic turnaround, with calling for the removal of economic sanctions imposed on Zimbabwe by their Western handlers being their first and foremost task. Self-serving statements such as the one that Biti gave this week will not take Zimbabwe anywhere.
This is not the first time that the opposition has advocated for the adoption of the South African currency. In April 2017 the MDC-T's so-called shadow Minister of Finance and Economic Development, Tapiwa Mashakada, made the same suggestion justifying the calls by stressing that 50 to 60 percent of Zimbabwe's foreign trade was with its southern neighbour. Mashakada, however admitted that Zimbabwe could only adopt the Rand if she had her own currency. He highlighted that the economic conditions which are conducive for the country to re-introduce its own currency were not yet ripe.
Around the same time, Biti also tweeted that, "Too late to adopt (the) Rand. Economy (is) now in so much disequilibrium (that) without reforms, ZANU PF will bastardise the Rand." This is the same Biti who has been "converted" and now fervently believes that the adoption of the Rand is now an urgent matter, whether ZANU PF is in power or not. When it suits him ZANU PF is the hindrance to the adoption of the Rand and when it does not, in a chameleon-like fashion, he calls all the media houses in Harare to tell them that the adoption of the Rand is now a matter of life and death. This time around he conveniently omitted to mention his earlier ZANU PF condition.
When a whole opposition party leader forgets about crafting life-changing policies and programmes ahead of a major election and opts to major in matters of a Government Ministry which he once presided over years back, one is reminded of the rich ChiShona sagely wisdom which was dispensed in proverbs and idioms such as "Matakadya kare haanyaradze mwana" (Recalling past times of plenty cannot be used to cure present day hunger). Biti's statement killed two birds with one stone. It indulged his thirst for the bygone days when he presided over the Finance Ministry, which he obviously misses, and the need to continuously appear politically relevant. What with a splinter group from his party having tried to kick him out of the political outfit which he founded.
Biti and his ranting aside, does Zimbabwe really need to adopt the Rand? The answer is an emphatic, no. First and foremost, the Rand is already part of the basket of foreign currencies which the country adopted in February 2009 as part of the implementation of that year's National Budget, which the then Minister of Finance and Economic Development, Patrick Chinamasa presented in late 2008. Prior to this hullabaloo, the Rand was being used in Zimbabwe without any issue especially in the southern region of the country. Until the introduction of the bond coins by the RBZ to increase the availability of loose coins on the market in 2014, Rand coins were the main source of loose change in Zimbabwe and they only fell out of favour with members of the public due to exchange rate differences with the bond coins.
Adopting the Rand is being erroneously assumed to be a silver bullet to Zimbabwe's liquidity challenges. What the country needs are initiatives which its manufacturing sector to significantly increase production levels, stimulate exports and reduce the prevailing high dependence on imports. There is need to address economic fundamentals to reduce the cost of production and to reduce production costs which would increase the demand for local goods. Reduced production costs also make Zimbabwe's exports on both the regional and global markets.
South Africa has its own economic challenges. It is currently battling with the effects of the downgrading of its credit rating by global rating agencies Standard and Poor and Moody's early this year, which reduced the southern African country's economy to junk status. The country is also struggling with common issues such as poorly performing state-owned enterprises among other challenges and this hardly makes it a role model for Zimbabwe.
Instead of Biti and ilk in the opposition camp playing the armchair economic critics, they should roll up their sleeves and ready themselves to work hard for the country's economic turnaround, with calling for the removal of economic sanctions imposed on Zimbabwe by their Western handlers being their first and foremost task. Self-serving statements such as the one that Biti gave this week will not take Zimbabwe anywhere.
Source - Nobleman Runyanga
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