Zimbabwe ZiG: ZNCC calls for confidence building and de-dollarisation
By Kwedu News
Zimbabwe National Chamber of Commerce (ZNCC) Chief Executive Officer, Christopher Mugaga says government needs a more sustainable approach to currency management and de-dollarise as the ZiG is not strong enough to compete with the US dollar.
Speaking at a breakfast meeting with the Reserve Bank of Zimbabwe Governor, Dr. John Mushayavanhu in Masvingo, Mugaga emphasised on the need to exit the multi-currency system and rely solely on the local currency.
“Why not just use the Zimbabwean dollar and see how it goes. This is not a ZNCC position mind you. There is risk of comparing our currency with the reserve currency such as the US dollar which you know is as good as any reserve currency.
“It’s difficult to have a multi-currency system and avoid arbitration and speculation. So we have to guard against that.
“Even the rand in its stability failed to compete against the US dollar in this economy. The US dollar economy is difficult to survive,” Mugaga said.
Resultantly, Mugaga said the ZiG will remain subdued as long as the US dollar remains.
He also said use of Statutory Instruments by government creates uncertainty and instability in the economy.
He said this approach can erode confidence in currency management and lead to instability adding that there is need for coordination between banks, the Central Bank, and the business community to address the challenges facing the currency.
The ZNCC CEO acknowledged that the country has struggled with currency management in the past, with six attempts to reform yielding limited success.
He attributed the erosion of confidence in currency management to past failures, including the introduction of bond notes and the auction system.
Addressing money supply growth and promoting a stable currency environment to support economic growth will be a key ingredient in the ZiG success, Mugaga said.
