THE question of the local currency has remained in the country's discourse since the introduction of the multiple currency regime in 2009.
The prevailing sentiment in academia and among economists, however, seems to be one against the reintroduction of the
Academics such as political scientist Ibbo Mandaza and economist Godfrey Kanyenze advocate economic theories that perpetually retain the use of foreign currencies, which is not sustainable.
In fact, what these self-acclaimed thinkers forget is that in the 1990s agricultural production was high because 90 percent of it was produced using local currency.
The raw materials which were produced using local currency were then accessed by industry at affordable local prices.
Manufacturers then produced export products that earned
In fact, that scenario helped reduce this country's foreign debt.
It is shocking to hear economists suggesting that
The high appetite for the US dollar that most Zimbabweans, including those in the
This is causing the current liquidity crunch and the perceived deflation scenario.
Questions that beg sound economic answers are: Do we need the US dollar to buy a razor for shaving our hair? Do we need foreign currency to pay for milling a bucket of maize in the rural areas? Do we need multi-currency to pay for transport by commuting workers to and from work places?
Who is really benefiting from the use of foreign currency? What impact has the use of foreign currency had on industry and commerce? Is the use of foreign currency for every little thing in
Imagine the huge amount of foreign currency that this country is using for non-productive ventures like the foregoing. In the current situation almost every industry is using foreign currency.
The idea of using a basket of foreign currencies was designed for free entry of foreign currency. Today it is believed there is over
The strategy to employ now is to raise gold production and curb illegal gold trading.
This strategy was employed partially in 2005 when the RBZ partnered security institutions and were able to get a sizeable amount of gold within a short period of time before the operations were stopped.
To increase gold production there is need to reduce licensing fees to manageable levels that motivate and enable many players to enter into gold mining.
People must remember the warring Arab countries' currencies are hedged on oil and for that reason these currencies have not been affected by inflation.
The introduction of the Zimdollar and retiring of foreign currency to banks should be done in phases to allow gradual confidence building in the appreciation of our local currency to occur.
Fellow citizens, remember
Panganai Kahuni is a political, socio-economic commentator.
Most Popular Stories
- Homeowners More Satisfied With Mortgage Servicers
- House Shelves Immigration Bill, Goes on Vacation
- Ford Tremor: Easy to Park, Hard to Pay For
- What Hamas and Israel Hope to Gain in Gaza
- Notorious RBG Tells All in Couric Interview
- House GOP Leaders Abandon Immigrant Bill
- Why Samsung Shares Plunged in the April-June Quarter
- NASA Plans to Make Oxygen on Mars
- Market Loses All of July's Gains in One Day
- Wisconsin Supreme Court: Voter IDs Must Be Free