- Published on 19 December 2014
- Written by The Telescope
President Robert Mugabe’s administration, is reportedly sittings on wads of a new Zimbabwe currency to be backed by a gold standard, which can be issued at a moment’s notice as a home grown panacea to manage a dwindling economy.
The idea for the gold-backed currency was first discussed in private, between Mugabe and fallen Libyan leader Muammar Gaddafi, on the side-lines of the inauguration of South African leader Jacob Zuma, in Pretoria in 2009, according to senior government officials.
Gaddafi wanted a common gold currency for the whole African continent, while Mugabe had proposed that it was better for the African Union (AU) member states to introduce the gold standard money individually, before announcing one common currency at a later stage so as to throw international financial players into confusion.
Disclosures of the top secret, come at a time when finance minister, Patrick Chinamasa has been defending the country’s use of a multi-currency regime since 2008, as a tactical strategy to contain "the enemy" because he cannot "devalue his own currency".
Harare officially uses a currency basket, which includes: The Botswana pula, the British pound, the euro, the South African rand and the US dollar as the citizenry monetary options, following the collapse of the Zimbabwe dollar due to mismanagement of the economy by Zanu PF. Early this year the RBZ added four new currencies, as legal tender namely: the Australian dollar, the Chinese yuan, the Indian rupee and the Japanese yen.
Dispite concerns that introduction of the new currency alone, without addressing the supply side of the economy, characterised by company closures, will fuel a new wave of inflation, Mugabe appears determined to rid the country of what his backers are calling "Western monetary imperialism".
This reporter, wrote about Zanu PF’s threats to return the local dollar last year in a London based online publication, whose report brought to light Mugabe’s intention to railroad a new currency as early as June 2015.
Economic analysts yesterday said, the idea of introducing new money prematurely was detrimental to the health of the economy, which has somewhat stabilised owing to the use of the multi-currency regime.
They point out to growth and external competitiveness challenges, which Zanu PF’s economic blueprint ZimAsset fails to address, as indicated by the economy’s low trend growth and poor foreign direct investment levels, declining share in world exports, coupled by high current account deficits, and an external debt now topping US$8 billion.
An economic adviser to the central bank also said government does not have the adequate resources such as money, facilities and logistics to introduce a new currency in the middle of growing political tensions.
"The budget for the project in foreign currency terms is simply beyond the state’s resource capabilities," she said.
The new printed currency, which is said to be warehoused at various high security locations in the capital, including Fidelity Printers and Refiners in Msasa comes in bank note denominations of $2; $5; $10; $20 ; $50 ; $100 and $200 according to Reserve Bank of Zimbabwe (RBZ), International banking sources. Fidelity Printers and Refiners, is a subsidiary of the central bank, and the largest security and commercial printing company in Zimbabwe, which also specializes in buying gold.
"The new money is already in the country, but I cannot disclose to you where it was printed, because that was done abroad," said the RBZ staffer. "We have many security locations in Harare where the new Zimbabwe dollar is being kept for security reasons. Once the president authorizes it’s issuance, it will be in circulation within 24hours after the central bank governor makes a public announcement to that effect. The only reason the new currency is being withheld, is to do with national security. There was an intelligence briefing made to President Mugabe, about the dangers of removing the multi-currency regime without careful planning, as there was a likelihood of a mass revolt in protest of the Zimbabwe dollar, which many locals do not want to see especially at this moment."
Further intelligence information, on the matter shows that the new currency, if not introduced by June 2015, has a strong possibility of being launched under an Emmerson Mnangagwa presidential administration, which government insiders say could be in office by 2016.
"Mugabe might be forced to stick to the multi-currency regime, although he really wants this new money out next year. However, it is certain that the Zimbabwe dollar will be back for good, whether we like it or not no later than 2016 under a Mnangagwa presidency. It is now being speculated in official circles that Mugabe has decided to retire, and that Mnangagwa will finish his term until 2018."
Mnangagwa is currently acting president, until mid-January 2015, when Mugabe returns from his Asian annual holidays.
The Telescope News has gathered from other sources, that government has licensed a Chinese company, to be the new printer of the Zimbabwe dollar, with technology from the firm expected to be acquired by Fidelity Printers, in the long run, to enable Harare to print it’s own money matching international standards and security features.
In the past the local dollar has been printed in Britain, Germany and Canada.
As early as 2008, Zimbabwe used to print her currency at German company Giesecke & Devrient. However the firm bowed down to pressure from rights groups over Mugabe’s government human rights violations and abuses, and decided to stop doing business with Harare the same year. German chancellor, Angela Merkel, had initially said Giesecke & Devrient’s Zimbabwe contract was a private matter. However her foreign minister at the time and currently, Frank-Walter Steinmeier, ordered the company to halt deliveries according to the Wall Street Journal.
The development comes after RBZ introduced bond coins as the troubled institutions claimed that it was only trying to ease 'change problems'. This is however not true, as far as economic analysts who spoke to My Zimbabwe News are concerned.
"Zimbabwe already has enough coins now. We have millions of South African coins already circulating in the country and change is no longer a problem as was the case around 2009 and 2010. Look, these Zimbabwean coins are only a test run of the actual Zim Dollar. The government and RBZ simply want people to get used to our own currency, this time in the form of coins before the actual Zim Dollar is officially introduced," said an Economist who spoke on condition of anonymity to My Zimbabwe News citing professional reasons.
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