Precious Maphosa , Business Reporter
ECONOMIC watchers have maintained that the Government needs to seriously consider basing the economy on the South Africa rand to ease the distortions and anxiety that have been created by the monetary announcements last week.
Presenting his monetary policy last week, Reserve Bank of Zimbabwe Governor Dr John Mangudya gave banks until the middle of this month to create separate foreign currency accounts for nostro and real time gross settlement (RTGS) as part of a raft of measures to preserve value for foreign currency and to boost market confidence.
However, Dr Mangudya maintained that the value of the nostro and RTGS remained the same but this has not calmed the markets and people in general.
Speaking at the Public Policy Research Institute of Zimbabwe public lecture last week, former chairman of the Competition and Tariff Commission Mr Dumisani Sibanda said in order for the currency crisis to be resolved the country should adopt the rand as its base currency even if it remains using the multi-currency system.
“The economy is suffering informal cash bases therefore the choice of currency is important as it will create a conducive economy,” said Mr Sibanda.
He said adopting the rand will also help trade between Zimbabwe and its biggest trading partner, South Africa.
“The country should adopt the rand, this will increase direct investment with South Africa. At the present moment the country incurs transactional costs with the use of the USD as 60 percent of the exports go to South Africa and 80 percent of the imports are from South Africa,” he said.
Local businesses are faced with a tricky situation. They have to order most of their stock in foreign currency mainly the rand and dispose them to customers using the RTGS money.
When they want to replenish their stocks, they have first to convert RTGS money which is denominated in dollars to real American dollars often on the black market and then convert the US dollars into rand.
Speaking at the same event, a former RBZ official, who is now with Desane Capital —an African Investment Advisory Firm, Mr Zibusiso Mkhwananzi said for the monetary policy presented to work, there has to be political will.
“As long as there is no political will, the policy might suffer like other policies that never saw the light of day,” he said.
He said the Government should mobilise more foreign currency so that it can stabilise the economy.