Share

Adopt SA rand: Tsvangirai tells Mugabe

Harare  - Zimbabwean opposition Movement for Democratic Change (MDC) party leader Morgan Tsvangirai has called on President Robert Mugabe's administration to adopt the South African rand as its major trading currency amid cash shortages in the southern African country.

Zimbabwe introduced a surrogate currency called "bond notes" this week on Monday to avert a cash crisis that has resulted in the majority of Zimbabweans failing to access their money from local banks. The country's central bank governor John Mangudya said the bond notes were backed by a $200m Africa Export Import Bank loan facility.

Despite being rolled out to the market, the bond notes have failed to ease bank queues amid reports that the surrogate currency is in short supply.   

"I urge the government to open negotiations with Pretoria so that we adopt the Rand as a major currency ahead of the US dollar because we trade a lot with South Africa compared to the Unites States of America; 95% of our economic activity is with the rand," Tsvangirai told reporters at the MDC party headquarters in Harare.

 'Zanu-PF's policies are short-lived' 

The former prime  minister slammed the country's central bank for introducing the bond notes saying they were not the solution to the country's liquidity problems.

"We can all be proud to be Zimbabweans with our own dollar but it does not mean anything if it's worth nothing. Time has now come to bring to the attention of the Zanu-PF government that all its policies are short-lived and bringing these bond notes that I equate to bond paper is suicidal; this is the last nail on the country's economy," added the former premier.

However, Zimbabwe's finance minister, Patrick Chinamasa, told News24 that Harare would maintain the status quo.

"We adopted the multi-currency regime and the rand is part of the currencies that we are using and people have a choice to use the rand or the US dollar or any other currency," said the finance chief.

Meanwhile, economist and University of Zimbabwe lecturer Ashok Chakravati said adopting the rand would bring stability to the country's financial market. 

"In 2009, about 60% of the currency that was circulating in the country's financial market was the South African rand and so we can adopt it informally and have our budget and prices of goods and services pegged in the rand currency," said Chakravati. 

Zimbabwe abandoned its own currency and adopted the multi-currency system at the height of the country's hyper-inflationary period. Some economists blamed the country's economic meltdown on chaotic land grabs embarked on in 2000 that displaced over 4000 white-commercial farmers and their employees.  

Chinamasa said that Zimbabwe would only re-introduce its own currency once there was a boom in the economy.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you think corruption-accused National Assembly Speaker Nosiviwe Mapisa-Nqakula will survive a motion of no confidence against her?
Please select an option Oops! Something went wrong, please try again later.
Results
No, her days are numbered
42% - 388 votes
Yes, the ANC caucus will protect her
58% - 538 votes
Vote
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE