Government defends currency move amid uncertainty

 By Thabani Zwelibanzi

Despite chaos and uncertainty, the government insists that the re-introduction of the Zimbabwe dollar was necessary to improve the country’s fortunes.

Addressing a press conference on Wednesday afternoon, a day after the weekly cabinet meeting, Information Minister, Monica Mutsvangwa said the government had “noted with satisfaction” a decision to end the multi-currency regime and replace it with the re-introduced Zimbabwe dollar.

“This measure is a critical step towards the full restoration of a Zimbabwe sovereign currency as envisaged under the Transitional Stabilisation Programme,” she said.

“Cabinet also applauds the other supportive measures being introduced by the Reserve Bank of Zimbabwe to bolster this initiative.”

Mutsvangwa said new currency was meant to enhance the affordability of goods and services as the majority of Zimbabweans earned in RTGs, yet goods were increasingly pegged in US dollars.

She said the cabinet called on all citizens and stakeholders to close ranks and give maximum support to the new policy measures, which she said were designed to ease the plight of “all our people and to place our country’s economy on a firm growth trajectory”. 

In terms of the usage of US dollars, Mutsvangwa said, basically nothing had changed, except that people had to change their money at banks to local currency before transacting.

She said the same applied to nostro accounts, allaying fears that they could be raided.

“As Zimbabweans,” Mutsvangwa pleaded, “let us be driven by a sense of national pride, self-belief and the commitment to guaranteeing the integrity of our financial system.”

She insisted that the country had put in place all the fundamentals that were needed before the introduction of the economy, including the much-touted budget surplus. 

But what is likely to add further confusion, Mutsvangwa and her SME counterpart, Sithembiso Nyoni hinted that the Zimbabwe dollar was only a stop-gap measure, while a new currency was being worked on.

Zimbabwe reintroduced a local currency on Monday to much scepticism from critics and massive applause from Zanu PF supporters. 

But what has followed has been massive confusion, with some banks blocking clients from withdrawing money in foreign currency accounts, saying they were waiting for direction from the central bank.

Some banks that blocked clients include Nedbank and NMB. However, the Reserve Bank of Zimbabwe was later to issue a statement saying clients should be allowed to withdraw from their foreign currency accounts.

On the issue of the continued payment of duty in foreign currency, instead of the local unit, Nyoni, who was standing in for Finance minister Mthuli Ncube, said this was something that was going to be looked into in future.

Justice minister Ziyambi Ziyambi said people that were importing luxury goods had the money and should continue paying duty in foreign currency.

Nyoni said that she was confident that the new currency measures that introduced a “mono-currency” would harness inflation.

Other issues that were addressed at the press briefing were that the cabinet had approved the Zimbabwe Media Commission Bill, which is one of the laws that replace the Access to Information and Protection of Privacy Act.

“The Bill provides for the establishment of the Zimbabwe Media Commission, its powers and functions as well as the financing thereof,” Mutsvangwa said. 

“The ultimate objective is to emerge with a vibrant, non-polarised, diverse and pluralistic media sector, which positively contributes to the deepening of the country’s democratic processes and the socio-economic development agenda.”

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