ZIMBABWE has millions in foreign currency that is adequate to sustain its economy, ramp up failing industries and sustain a return to dollarisation, opposition leader Nelson Chamisa has said.
Calling for a return to dollarisation and abandonment of the local RTGS currency, Chamisa warned President Emmerson Mnangagwa not to introduce a new local currency until confidence returned to the banking sector and government.
“I know the question is where will you get the US$? The US$ is here in the country, nobody is going to put their money in a hole. The biggest hole is government, so they don’t want to invest in banks because they know there is no confidence. If you go to houses, particularly in those other suburbs, you will have the banks of Scotland, the bank of India, all sorts of currencies, but the people will never deposit them in the banking system because there is no confidence,” Chamisa told journalists in Harare yesterday.
He said the crisis in Zimbabwe, which has seen companies fold owing to a biting shortage of foreign currency, prices spiking as the local currency continues to lose value, both on the interbank and black market, was being caused by bad politics.
“The cash crisis is a political crisis, so you cannot resolve this so-called cash crisis without resolving the fundamental governance issues and politics is the issue. (Former United States) President Bill Clinton once said it is politics stupid and in our situation, it is the politics, stupid. What does it mean? Let’s resolve the politics and we will be able to unlock the economy,” Chamisa said.
“We have said it over and over again, in order for you to resolve the cash crisis, you need confidence and trust, look at our trust deficiency.”
High levels of corruption and policy inconsistencies have also made Zimbabwe an unattractive destination for Foreign Direct Investment, depriving the country of critical capital injection which could boost the economy.
“Cameroon, Sudan, Zimbabwe and Nigeria are on the list of the World Bank for the countries that have the highest political risk. We must eliminate that risk and then begin to have a currency that is stable and we have said, instead of just having a basket of currencies, let’s have an anchor currency, which is based on the USD and then we move progressively to then deal with the other issues,” the opposition leader said.
“You can’t have this fake currency and you want to report false surplus which, in real terms, is not there. So we need to deal with that issue; and if we are in government, we will deal with it.”
Mnangagwa’s government has said it will make it illegal to use foreign currency for local transactions.
“I have said that we would achieve that either before the end of the year or by the end of the first quarter of next year,” Mnangagwa told Bloomberg last week.
Mnangagwa said Zimbabwe would not develop if it does not have its own currency, which will stabilise prices and restore value in salaries of the workers, which have been eroded to way below US$100 per month.
Zanu PF, through its youth league deputy secretary Lewis Matutu, has admitted that it is harbouring corrupt leaders in government and ministers whose children have become black-market kingpins.
Matutu has threatened to name and shame the corrupt, who he accused of sabotaging Mnangagwa’s economic turnaround plans.