Finance Minister Mthuli Ncube has argued that dollarising the economy in Zimbabwe is a “bad idea” even as the local currency is visibly falling everyday against the US dollar.
Zimbabwe’s ZWL currency is officially trading at 124:1 while more than 250:1 in the black market. President Emmerson Mnangagwa’s regime pays civil servants in the local money that is continuously falling.
Teachers have already launched a job action against ZWL salaries by not attending classes since the official opening of schools three weeks ago.
They want to be paid US$540 that they used to get during the Government of National Unity (GNU) under the late former President Robert Mugabe.
On Wednesday, Gutu East MP Berita Chikwama asked the treasury boss what his Ministry was doing to manage the black-market rate which has since skyrocketed.
“Do you have any mechanism or plan which reduces black market exchange rate? Most shops in rural areas are using the black market rate on their pricing. As a result, the prices are very high and cannot be afforded by the rural people,” she asked.
Ncube said the government had announced policies in the past weeks both on the fiscal and monetary front for promoting the use of the domestic currency.
He added that the Financial Intelligence Unit had been unleashed to arrest those behind the spiking of the rate.
“For that, we have basically said that from now on, you only need to pay up to 50% in hard currency and the rest is in domestic currency. Companies have been given a similar leeway when it comes to payment of corporate tax.
“We are accepting a portion in domestic currency to promote the use and demand for our own domestic currency.
“Now, coming to those who are breaking laws and not pricing their goods at the auction rate, we have a Financial Intelligence Unit. If they are stretched, we are supporting them in hiring more personnel so that they can get to those rural areas where the Hon. Member mentioned to enforce the law in terms of compliance.
“You will see in the last few weeks, a few people and a few companies being mentioned in the media that have been fined for using the black market rate in the pricing of their goods. This is hurting our ordinary citizens. As Government, we are aware of this.
On dollarising the economy Ncube vowed: “I want to be clear, we are not US dollarising. We will not US dollarise. US dollarisation is a very bad idea. The reason why our industry is performing well, the utilisation is up there, the house of souvenirs is because we have a domestic currency.
“It has made our economy to be competitive; we cannot use the US dollar as a sole currency. That will be a very bad idea indeed.” Nehanda Radio
