Chinamasa says let us not be prisoners of the past

HON. SEN. KHUMALO: Thank you Mr. President for giving me this opportunity to ask my question. My question is also going to the Minister of Finance and Economic Development.  Previously before 2008, people could open foreign accounts as well as domestic accounts.  The monies in the foreign accounts were used by anybody because people were encouraged to deposit their monies in those accounts.  Government also borrowed the money because these accounts were long term savings accounts.  The diaspora people at the present moment send United States dollars but people are afraid that it is going to lose value if they deposit it in the bank because of the likelihood of the introduction of bond notes.

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THE DEPUTY PRESIDENT OF THE SENATE Order, are you asking a question?

HON. SEN. KHUMALO: Yes, is it going to be the same or profitable to have two accounts so that it can be money that people know they will not use, like the foreign accounts which were there before and people would send money knowing that the money would be in these foreign accounts?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  I thank the Hon. Senator for the question and I can see that she is hacking back to the years 2007/8 raising concerns about confidence.  I am fully aware when there is this resistance, reaction; I fully understand where it is coming from.  Like I said earlier, let us not be prisoners of the past; otherwise we will never craft a way out of our economic challenges.  We have to learn lessons and we have learnt lessons to ensure that there is sound management of our economy.

On the question you asked – currently the United States dollar is a medium of exchange in our economy, which means our accounts are in US dollars. In fact, we do not have accounts in Rands, Pounds or Euros and in the other currencies that you find in the multi-currency basket which is why there are measures we announced last week to try to bolster and restore the functionality of the multi-currency basket.  We want to encourage usage, not just of the US dollar but of the other currencies as well. We have sent out a directive to all Government departments, Ministries, divisions, parastatals, to say you must accept payment of services and goods that you offer in any of the currencies which are in the basket. If you have accepted it will be on the basis of any exchange rate that will be publicized by the Central Bank from time to time.

When they do receive these currencies whether they are Rands, British Pounds or Euros, they must sell those currencies to the Central Bank.  So, that is the arrangement and I think that for now this arrangement will work very well for us because we are not contemplating in the foreseeable feature to bring back the Zimbabwean dollar.  We only do so when the macro-economic fundamentals are right, which is why the measures we are taking about the structure of our budget, parastatals reform of the State-owned enterprises, ease of doing business.  When we think that all those things are in place then we start talking about the return of the Zimbabwean dollar.  Right now, the Zimbabwean dollar in the foreseeable future is not coming.  Thank you Mr. President.

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