THE ACTING PRESIDENT OF SENATE: Hon. Member, did he phrase it correctly? Is that what you wanted to hear that the ZiG should be able to buy fuel, passports and air tickets?
HON. SEN. PHUTI: For now, what makes it impossible to buy using ZiG?
HON. D. K. MNANGAGWA: Thank you Mr. President. I think what the Hon. Senator is referring to is the desirable situation where we have fully de-dollarised and we are fully transacting in our local currency, ZiG.
What we have in our economy, Mr. President, is a multi-currency regime where 85% of our transactions are in United States dollars and 15% are in the local currency. The structure that we have for our currency only covers the 15% of the currency in circulation, which means that even if we desired, there is not enough ZiG in circulation to support these transactions. What the fiscal authorities are doing is making sure that as we go through a de-dollarisation plan and roadmap, it is done in a way that does not cause chaos in the markets. You will find that over the next few weeks, over the next few months, there will be certain taxes that will strictly be in the ZiG as opposed to optional, and eventually this is how we get to a de-dollarisation plan.
Now, speaking to the areas that were pointed out because they are very specific – I will start with the fuel. Fuel dealers have the option to sell in ZiG but right now most of them are preferring to sell in United States dollar, a dispensation that has been allowed. To give background as to how that came about; it was during the advent of fuel queues and shortages where a social contract between Government and the fuel dealers came about where the fuel dealers would be allowed to sell their fuel in United States dollars and they would guarantee supply.
I believe that social contract and the mechanics around it is being discussed. It is a sensitive area that we do not want to rush or expediently go to without having spoken to all the stakeholders. Similar to some of the PPP arrangements that are there, I think the Government holds sanctity of contract sacrosanct and so, you would find that for passports, they were accused because you would spend days at the Passport Office. An investor came in, and part of those arrangements included foreign currency pricing. These are stamped-in documents that need to be reviewed and the relevant ministries, the relevant authorities and stakeholders are looking at how we can possibly have all these areas within the ZiG domain.
I will say Mr. President, these same operators, fuel dealers, the passport companies, will have to pay their taxes. Come next QPD, they will have to look for 50% of their taxes in ZiG. It will not be sustainable for them to continue going to the interbank to look for ZiG to pay their taxes. So, it is eventually through a market-driven process. They will find themselves having to charge at least a certain quota of their services and their products in ZiG and local currency. It will allow the mix between the United States dollar and the ZiG in an organic and market-driven way to increase without creating scarcity and chaos in the market. Mr. President, I thank you.
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