Zimbabwe cannot adopt the South African rand as its own currency because it is foreign currency which has to be earned, Agriculture Minister Joseph Made who was standing in for Finance Minister Patrick Chinamasa told the Senate yesterday.
Responding to a question from Senator Bheki Sibanda on what challenges militated against Zimbabwe negotiating with the South African based monetary union to allow the country to adopt the rand as the official currency, Made said the rand was already part of the multi-currency system adopted in 2009.
“Government does not believe that Zimbabwe’s challenges are a currency phenomenon but rather a structural challenge,” made said.
“In any case, the rand is foreign exchange that needs to be earned. We do not print it. It can also be externalised.”
Made said competitiveness is brought by increasing production and productivity in order to reduce the average cost of production through economies of scale.
“Usage of the rand means that Zimbabwe will need to earn and sell US dollars to obtain the rand from South Africa. So, it is very clear Mr. President that the rand will have to function as a multi-currency designated in the same basket; not as an exclusive currency.”
Q &A
HON. SEN. B. SIBANDA asked the Minister of Finance and Economic Development to inform the House what the perceived challenges or problems are that militate against Zimbabwe negotiating with the South African based monetary union so as to allow the country to adopt the rand as the official currency while continuing to solve the economic dilemma.
THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (HON. DR. MADE) on behalf of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Mr. President, I want to thank the Hon. Senator. Hon. Senators will be aware that the Rand is part of the basket of currencies used under the multi-currency system of exchange in Zimbabwe since 2009.
In this regard, Government is (not)against the usage of the Rand in Zimbabwe alongside other currencies in the basket of nine currencies. The multi-currency system provides a wide range of choice of currencies to Zimbabweans.
Government does not believe that Zimbabwe’s challenges are a currency phenomenon but rather a structural challenge. In any case, the Rand is foreign exchange that needs to be earned. We do not print it. It can also be externalised.
Competitiveness is brought by increasing production and productivity in order to reduce the average cost of production through economies of scale. Usage of the Rand means that Zimbabwe will need to earn and sell US dollars to obtain the Rand from South Africa. So, it is very clear Mr. President that the Rand will have to function as a multi-currency designated in the same basket; not as an exclusive currency. On behalf of the Minister of Finance and Economic Development, thank you.
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