Zimbabwe will reintroduce domestic currency only when conditions are ripe and critical economic fundamentals are in place since using the US dollar as an anchor currency is now unsustainable, according to Finance and Economic Development Minister Mthuli Ncube.
The minister said the truth that has not be told was that Zimbabwe used US$300 million annually to import the US dollars that were circulating in the economy, which were used for daily transacting by citizens and corporates alike.
However, the bulk of the USDs have since disappeared from the Zimbabwean market.
Minister Ncube said while he has previously intimated that Zimbabwe will reintroduce domestic currency within 12 to 18 months, what was critically important was to make sure the country achieved the right economic fundamentals first.
The finance chief said this yesterday while delivering a lecture to students of the National Defence Course – Intake 7 of 2018 at the Zimbabwe National Defence University.
Setting the right conditions for the return of the domestic unit will be done through a cocktail of economic reforms to be implemented through the Transitional Stabilisation Programme (TSP), which the minister launched in October last year.
Some of the TSP’s objectives include fiscal consolidation and addressing the twin evils of budget and current account deficits, economic growth, stemming out corruption, global reengagement, strengthening resource mobilisation, promoting investment and trade among others.
Global multilateral partners that include the International Monetary Fund, World Bank, African Development Bank and European Investment Bank, which are owed (directly and indirectly) arrears running into several hundred millions of dollars, have endorsed the TSP.
Zimbabwe has been using a multi-currency system, dominated by the US dollar, which remains the reporting currency for accounting purposes, since February 2009 after scraping its domestic unit, which had been ravaged by inflation following nearly a decade of economic upheaval.
Source : bulawayo24.com