Chamisa calls for full dollarisation to deal with inflation

Movement for Democratic Change leader Nelson Chamisa today said Zimbabwe should go back to full dollarisation to curb “ravaging inflation” because the Zimbabwe dollar cannot sustain itself.

Inflation hit 676.39% in March up from 540.16% in February. Month-on-month inflation almost doubled from 13.52% in February to 26.59% in March.

Critics, however, believe it is much higher with American economist Steve Hanke saying it is at 926%.

In a tweet this morning, Chamisa said the latest official figures from the government show that:

“1.Authorities have lost the battle on inflation &will not win it;

“2.With ravaging inflation, the Zim dollar can’t sustain itself since it’s losing value & its key function..Store of value

“3.The solution is full dollarisation from inflation perspective.”

Magwade said that while he fully supported Chamisa he believed Zimbabwe still needs its own currency.

ChariWalter asked: “What’s next after dollarisation? is it the only solution without production, production and production.”

Chimoto chipped in: “Are you aware that the world is shifting away from the dollar? Do we have the USD in abundance for full transaction by general public?”

Tchasura said: “Dollarisation without grants, FDI and Donor funding coming is not a solutions. Dollarisation without policy change will not work. Dollarisation without export will not work.”

Ramsey Tynash said it was better to adopt the South African rand because Zimbabwe had direct trade with Pretoria.

“Iro Dhora$ reAmerica morida zvisingaiti. Manje mukaDhoraraiza todzokazve here Paya pekuti inotoshaikwa futi Mari yacho…I prefer the rand because we have direct commerce with SA….so it won’t be as scarce as the Dhora$ hameno,” he tweeted.

Kidd Charehwa differed. He argued: “Dollarisation is not the solution..we need to address the underlying structural issues around how prices are set,how public Fin is conducted, SOEs,Fin sector regulation ,labour market rules & social safety net & institutions.. boost productivity thru supply side interventions.”

The government says it will not back down on de-dollarisation but this will take time. It has given itself five years to do that.

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