Oliver Kazunga, Senior Business Reporter
ZIMBABWE needs to adopt a soft currency like the South African rand as reference exchange money to become competitive and attract the much-needed foreign direct investment, economics researcher and businessman, Mr Dumisani Sibanda has said.
Since adoption of the multi-currency system in 2009, Zimbabwe has dominantly used the United States dollar as a reference currency.
Speaking during a public lecture organised by the Public Policy and Research Institute of Zimbabwe (PPRIZ) in Bulawayo last week to unpack the 2018 mid-term monetary policy statement, Mr Sibanda who is former Competition and Tariff Commission (CTC) chairperson urged monetary authorities to embrace the rand given that South Africa is the country’s major export destination.
“Investors who come into Southern Africa come through South Africa. There are very few clean investors who come directly to Zimbabwe or Botswana. This is probably why most of these companies have headquarters in SA.
“Zimbabwe has to work with South Africa to attract foreign direct investment. The financial capital city of South Africa is Johannesburg and if we move to adopt the rand we will be able as a country to attract foreign direct investment,” he said.
Industrialist and United Refineries Limited chief executive officer, Mr Busisa Moyo, is one of the strong advocates for rand use. Posting on his Twitter handle recently he said:
“You need a soft currency like the rand to be export competitive. A strong hybrid dollar regime is a dead end for exports. I don’t think the role of currency in exports is fully understood!”
Mr Sibanda said Government should consider adopting the South African rand without necessarily joining the Rand Monetary Union.
He said this was critical given the problem of cash shortage and loss of productive and export competitiveness as a result of using the US$.
The US$ has been getting stronger and stronger when all the other major currencies were losing value including the rand,” said Mr Sibanda. — @okazunga