The Confederation of Zimbabwe Industries (CZI) says the Reserve Bank of Zimbabwe (RBZ) must compensate individual account holders according to their different bank balances as it moves to demonetise the Zimbabwean dollar, shooting down the central bank’s proposal to pay flat figure of $5 per account.
The central bank announced last week it would pay up to $20 million by end of June to all individuals who were affected when the country dumped its inflation ravaged currency for multi-currencies in 2009.
The move is expected to aid efforts to bury market fears on possible return of the local currency which is impacting on business confidence.
Central bank governor John Mangudya said in his first half monetary policy last week a flat figure of $5would be paid to all individual account holders.
While some analysts have described the proposal as fair, the CZI, which agreed with most of the monetary policy proposals to address issues affecting the economy, however, differed with the central bank on demonetisation.
“The demonetisation of the Zimbabwean dollar has been long overdue and CZI welcomes the governor’s initiative,” said the CZI in a statement at the weekend.
“However CZI recommends that instead of giving account holders a flat amount of $5, payment based on the amount that was in the account will likely contribute towards increasing confidence levels.”
Since the announcement, there is conflicting sentiments as some feel the central bank is short-changing them while some feel the proposed $5 was adequate compensation as the local unit was valueless at the time.
However in the monetary policy, the central bank said all genuine or normal bank accounts as at December 31, 2008 would be paid an equal flat amount of $5 per account.
“The then prevailing United Nations (UN) exchange rate would be used to convert Z$ balances that were as a result of arbitrage opportunities “burning” and for Z$ cash to be received from the walk-in banking public,” it said.
Last week, BancABC noted that the United Nations exchange rate in 2008 was at Z$35 quadrillion for $1 with broad money supply at $6 million.
On other issues affecting the local manufacturing industry, the CZI lauded efforts by the central bank at supporting resurrection of local industry through providing access to cheap capital for distressed firms and supporting exports.
Choked by flooding cheap imports and failure to recapitalise, Zimbabwe’s once vibrant manufacturing industry is de-industrialising with the few firms that are still open, operating at below 40 percent capacity.
“CZI appreciates the absolute amnesty on all import bills of entry not acquired prior to 31 December 2013. We strongly urge industry to take advantage of this amnesty and fully comply with the requirements of the law,” it said.
The industrial body called for a reduction of bank charges and interest rates as part of wider moves to support the local economy while applauding the introduction of small change through bond coins.
“CZI calls for the public to accept bond coins,” the industrial body said in reference to rejection of the bonded currency by some sections of the citizenry.- The Source