Jonathan Moyo applauds Mthuli Ncube for refusing to ditch the Zimbabwe dollar


*Government should consider paying contractors in forex (or ZWL at market determined exchange rate at point of payment) at reasonable or competitive prices for goods and services. This could have a positive impact because, currently, national projects are funded by way of paying contractors in ZWL which they immediately take to the market to get value. In essence, they dump their currency at the point of receipt. Notably, over the years, Zimbabweans have become oriented to work and deal on the basis that the minute they get Zim dollars, they want to dump them for forex.

It seems that  if demand is created for the Zim dollars, contractors would most likely keep the Zim dollars in their accounts and exchange them only on a need basis. After all, it is a normal global practice to promote savings, but if somehow a country cannot do that with its own currency, then it necessarily fuels artificial demand for forex.

*In order to create demand for the local currency, all not just some taxes should be paid in ZWL.

*Capital projects should be funded by long term financing from external lenders.

*At long last, there’s now a clear and present opportunity to pursue privatization as a viable option for funding roads, dams, electricity, water and telecoms. And, taking a leaf from Russia’s recent experience, consideration should be given to sell some prized State assets in ZWL.

Otherwise, the measures in the statement by Minister Ncube are an appropriate, significant and timely step in the right direction. But of course the devil is in the cooperation challenge: measures like these have the best chance of success where and when everyone in the economy and across the political divide is ready and willing to play their part!


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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