MDC calls for scrapping of bond note in proposed alternative to revive Zimbabwe’s economy

The other thing is currency reforms.  Mr. Speaker Sir, I still believe that the exchange rate is still 1:1.  The Minister, when he was at Chatham House in London, said that no, the bond note is not equal to the United States dollar.  What is it?  We all know that it is 1:1.  What we need in this country are currency reforms.  You need to choose a currency in the basket which is commonly available and in this case I propose that we adopt the Rand as our current.  I will give reasons for that.  Sixty percent of our imports come from South Africa.  Whether it is fuel, food, medicines, capital or intermediary goods, they all come from South Africa.  We go to South Africa and we buy in Rands and what people are now doing, if they buy something for R20 the price here is $20.  I buy something for R100; I sell it for $100 here.  That is causing a lot of inflation, yet we are buying these things in Rands.

So, I propose that why not price our products in the shops in Rands because it is in wider circulation, so you will not waste a lot of foreign currency buying things from South Africa.  You would use your United States dollars to buy products that are denominated in foreign currency for imports, for example machinery from Germany, you have to buy in foreign currency, chemicals from America, you use foreign currency, but basic commodities that you buy using the Rand, price them using the Rand. There will not be any opportunity for price arbitration as I have told you; marking your product price from R100 to US$100 is usurious. I therefore propose that we adopt the Rand as an anchor in our currencies basket. Its supply is cheap. Instead of using the few American Dollars that we have to import United States Dollars, let us use that money to import the Rand. At the end of the day, maybe three million Zimbabweans in the diaspora – may be two million in South Africa – imagine if they send the Rand home since that will be the dominant currency in the basket instead of the United States Dollar which is a difficult currency dominating our currency basket.

As the opposition, we are demanding that we join the Rand Monetary Union area. Of course, there are some obligations linked to that move. The first obligation is that we are required to have macro-economic convergence and second, we have to address our micro-economic fundamentals. They further want to know the amount of reserves we have and in our case, our reserves are only US$200 million – [HON. BITI: Which I left.] – reserves and that is enough for two months fuel supplies only yet it must provide six to seven months import cover. In fact, our ideal reserves should be at least US$1 billion for us to be able to cover our critical imports. Therefore, they will consider our macro-economic conversions in terms of how many we have and what is the level of budget deficit. They also look at our balance of payments (BOP) position. If you look at our balance of payments, we have got a trade deficit of US$3 billion. We are exporting under US$3 billion and importing over US$6 billion. Therefore, we have a trade gap of over US$3 billion and they also look at that. They also look at steps we are taking to introduce our own strong currency. In this, there are fundamentals which have to be attended to before that local currency can come. So in the mean time, let us use the Rand because it is awash in the region and its supply is not as complicated as the United States Dollar.

Mr. Speaker Sir, using the Rand should also not be an accident but that is the future of Africa when we talk of economic integration. In January 2018, the Heads of State and Government signed the continetal free trade area agreement in Kigali. The continental free trade area seeks to create one common African market with a potential demand of one billion people and a Gross Domestic Product (GDP) of US$2, 4 trillion. It is huge market which we must capitalize on. We must go through the continental free trade area and get into regional integration. What a way other than joining the Rand Union to start being integrated into the sub-region.

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