President Emmerson Mnangagwa today said the re-introduction of the Zimbabwe dollar after almost a decade was the only way to get the economy to truly take off.
In a statement posted on his twitter handle, Mnangagwa said the conditions for Zimbabwe to have its own currency are in place.
“Let us work together, as one people, to make it a success,” he said.
Zimbabwe reintroduced its Zimbabwe dollar, combining the RTGS dollar and the bond notes, yesterday and made it the sole legal tender, a move that has been condemned by some, especially in the opposition, who are still calling for dollarisation.
Finance Minister Mthuli Ncube said the government had to step in because the country was self-dollarising which was detrimental to economic growth.
“It has always been clear that for our economy to truly take off, we need our own currency,” Mnangagwa said.
“While the multicurrency regime helped to stabilise the economy, it did not give us control of monetary policy and left us at the mercy of US dollar pricing which has been the root cause of inflation.”
Inflation has soared from 5.4 percent to 97.85 percent since the government introduced new monetary and fiscal measures to turn around the economy in October last year.
“When the majority earn in the local currency, but goods are priced in US dollars, the outcome will only ever be a two-tiered economy: Stable and affordable prices for those with access to dollars, while the majority face an unrealistically high cost of living. This is unfair and unsustainable.”
A study by the Ministry of Finance showed that prices had declined by 19 percent in US dollar terms between January last year and June this year.
“Before we could have our own currency, it was, however, important that key fundamentals were first put in place. Central to this was regaining control of our budget, through decreased spending, increased revenue and, for the first time in recent memory, budget surpluses. Under the careful guidance of Professor Ncube, this has been achieved.
“As a result, yesterday we passed a Statutory Instrument to abolish the use of multiple currencies and make the Zimbabwe dollar the sole legal tender with immediate effect. This is a key component of our transitional stabilisation programme, and an important step in restoring normalcy to our economy.
“Government and the RBZ are taking the necessary steps to ensure this move is a success, through increasing the flow of forex into the interbank market while also making forex available to individuals and small businesses through bureau de changes.
“On a day to day basis, this will change very little. People will still be paid in RTGS dollar and bond notes, and goods and services will be priced in the same currency. Those holding Nostro accounts will have access to those accounts in the currency they held.
“The only way forward is to reform so that we build a country in which all have the opportunity to prosper. We cannot be fearful of change, but must boldly embrace it as we move forward. The conditions are in place for Zimbabwe to have its own currency. Let us all work together, as one people, to make it a success.”
Prices in US dollars as worked out by Ministry of Finance
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