Ex-Finance minister Tendai Biti has said it is too late for Zimbabwe to adopt the South African rand as a dominating currency.
Writing on his Twitter account, the opposition People’s Democratic Party (PDP) leader said: “Too late to adopt rand. Economy now in so much disequilibrium without reforms Zanu will bastardise the rand as they have the Zim$ &the US$.”
Adding: “ . . . foreign direct investment (FDI) is not flowing into Zimbabwe because of toxic and predatory Zanu PF politics . . . remove Zanu PF and billions will pour into this economy”.
“Let’s rebuild productive base and build reserves of at least $9 billion. We maintain regime of multi-currencies for now,” Biti said.
His sentiments come after Reserve Bank of Zimbabwe (RBZ) deputy governor Kupukile Mlambo last week said rand would benefit the country, presently battling an acute cash crisis and help alleviate cash shortages.
Mlambo pointed out that the central bank would prefer the South African currency — which firmed 0,6 percent against the dollar on Wednesday just off the 20-month high reached earlier this week — to be Zimbabwe’s dominant currency, following hints by President Robert Mugabe in a recent interview that the country needed to adopt the rand.
Presently, South Africa remains Zimbabwe’s biggest trading partner. In the first two months of the year, Zimbabwe registered a trade surplus of $14 million against South Africa with imports worth $171 million making their way into the country compared to exports of $185 million.
Over three million Zimbabweans who have migrated to neighbouring countries remitted an estimated $450 million in the first nine months of 2016 alone. Various business quarters have been lobbying government to formally adopt South Africa’s currency as the country’s formal trading exchange.
In his 93rd birthday interview, Mugabe said the country should adopt the rand to mitigate severe liquidity and cash challenges.
“Well, I don’t know why the ministry of Finance, together with the Reserve Bank, have not wanted to use other currencies. I have asked actually again and again kuti (that) why not have euros, why not have yen, why not have rand alongside the dollar?”