The ManicaPost
Liberty Dube Business Correspondent
ZIMBABWE should consider restructuring its currency regime through joining the rand monetary union as well as rebalance the economy for sustainable growth through devising comprehensive macro economic reforms and expenditure realignment.
This emerged at the Zimbabwe National Chamber of Commerce pre-2017 national budget seminar held last Friday at a local hotel where stakeholders from across Manicaland converged to deliberate on the state of the economy and the budget outlook.
In a wide-ranging interview, the ZNCC chief executive, Mr Christopher Muganga, cited falling aggregate demand, declining industry production capacity, liquidity and cash challenges, unsustainable current account deficit and structural challenges impeding growth as some of the critical challenges bedevilling the economy.
He bemoaned the closure of most industries in Manicaland which used to be one of the country’s economic hubs.
Companies such as Mutare Board and Paper Mills, Cairns Holdings, Afri-Safety Glass, formerly PG Glass have either closed shop or are operating below par.
“We made a mistake in choosing the US dollar as a currency from 2009. It was a wrong choice of currency. If we could maybe join a rand monetary union or adopt the rand as a currency of reference we would go far. The US dollar is an anti-developmental currency. The never-ending stand-off between Washington and Harare will make the case of using the US dollar a difficult experience.
“The solution lies in being honest — to restructure our currency regime — it means joining the rand monetary union since it will bring discipline in terms of policy and printing of money. One of the major fears generally by Zimbabweans is the money printing culture which is the reason why people seem to be resisting bond notes. They believe Government will not print the bond notes to the tune of only $200 million,” said Mr Mugaga.
The union comprises South Africa, Lesotho, Swaziland and Namibia and these countries use the South African Rand as their main currency.
He believes, if the country joins the rand monetary union and subsequently adopts the Rand, the country despite surrendering the monetary authority or powers to Pretoria through South Africa Reserve Bank, it will make an economic sense considering that South Africa is Zimbabwe’s major trading partner where almost 60 percent of the country’s goods are coming from the neighbouring country. Mr Mugaga said he was saddened by the dwindling of big industries in Mutare and urged Minister of Finance and Economic Development, Patrick Chinamasa to take serious concerns of business in Manicaland province.
“Mutare used to be one of the industrial hubs of the country but most of their corporates have somehow become small scale companies. Bigger companies have crumbled. We expect Minister Chinamasa to take seriously the concerns of business in Manicaland. There are specific industries in Manicaland which are unique and cannot be found anywhere in Zimbabwe. When the budget speaks, let it not talk to a Harare economy. Zimbabwe is bigger than Harare. We are expecting a fiscal policy which will speak into provinces not only one region,” added Mugaga.
