RENEWAL Team interim secretary-general and former Finance minister Tendai Biti yesterday called on the government to disband the use of the US dollar (US$) as the official base currency and officially adopt the softer South African rand (SAR) to stimulate economic activity.
Biti made the remarks while giving his party’s state of the economy address where he said that the country had to take decisive action to stem the current economic meltdown.
“We agree the issue of the US$ needs revisiting, but that does not mean the return of the Zimbabwe dollar. We propose US$ should be devalued by bringing in the rand as the official currency and joining the Rand Monetary Union,” Biti said.
His remarks came shortly after Finance minister Patrick Chinamasa admitted that dollarisation had caused distortion in the economy.
“Let’s find some consensus on the economy and differ only on the operational issues,” Biti said.
He said the Renewal Team was proposing a “third way” of dealing with Zimbabwe’s economic problems through a 16-point plan.
“Among other things the 16-point plan includes convening of an all-stakeholders dialogue on the economy, immediate leveraging of Zimbabwe’s resources in the mining sector and addressing Zimbabwe’s debt question and the execution of a home-grown brewed debt programme, ZAADS,” Biti said.
He also proposed that the government should unconditionally re-engage the international community, dialogue with multilateral financial institutions like the African Development Bank, Africa Import Export Bank, PTA Bank and the Development Bank of Southern Africa and repeal the Indigenisation and Empowerment Act to unlock cash inflows.
Biti said these would allow the issue of a $2 billion international bond that will be directed as an immediate stimulus for Zimbabwe.
He said in place of the Indigenisation Act, the government should articulate “an alternative broad-based empowerment and upliftment model that is transparent, fair and just as envisaged in Article 14 of the Zimbabwe Constitution”.