Michael Tome Business Reporter
FINANCE and Economic Development Minister Professor Mthuli Ncube on Wednesday said the country was making remarkable progress towards total adoption of a mono currency as the majority of the country’s bulk transactions were conducted in the domestic currency in the last 10 months.
His remarks were triggered by MDC-A Vice President Mr Tendai Biti, who implored Minister Ncube to “swallow his pride” and repeal Statutory Instrument 142 (2019) that officially re-introduced the Zimbabwe dollar mid last year.
There was heated debate on the matter in parliamentary on Wednesday.
In his argument Mr Biti said Minister Ncube’s move which “exempted Zuva Service Stations to charge fuel prices in United States dollars” was overwhelming evidence of the country’s failure to completely de-dollarise.
However, according to Minister Ncube, in the last 10 months the country recorded 190 million transactions valued at ZW$460 billion, indicating the significant use of the reintroduced local currency in the economy.
Mr Biti had raised the issue of currency exemptions obtaining in the economy saying, “. . . what kind of a currency has exemptions? If you are going to use the Zimbabwean dollar, use the Zimbabwean dollar only and there is no exemption.
“If the local currency, the Zimbabwean dollar has failed, why does the Minister not swallow his pride and repeal SI 142, 2019?”
Minister Ncube, however, responded indicating that de-dollarisation was work in progress and requires more years to be perfectly operational.
Many jurisdictions that have dollarised took some years, some decades to totally de-dolarise.
“It takes time and I think we have done very well to achieve $460 billion worth of transactions in 10 months. In a new domestic currency, it is a miracle and I think we are doing very well in that direction. We have no intention of reversing to a hard currency situation,” he said.
Minister Ncube argued that the bulk of the transactions in the country are in the domestic currency, not in foreign currency, thus de-dollarisation was gaining traction.
Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya, a fortnight ago also alluded that de-dolarisation was not an overnight process, but takes several years.
“De-dollarisation is a gradual and painful process, we have countries like Belarus which are now in the eighth year of de-dollarisation process, so don’t expect our de-dollarisation to be perfect yet,” said the central bank chief.
The debate stemmed from the recent announcement by Zuva Petroleum that eight of its service stations have been granted DFI status, which allowed them to transact in foreign currency, a position which has largely been interpreted as policy inconsistency by the Government.