Zimbabwe Not Planning to Re-introduce Local Dollar
Finance Minister Patrick Chinamasa says the government is not planning to re-introduce the Zimbabwe dollar phased out in 2009
WASHINGTON DC — Finance Minister Patrick Chinamasa says Zimbabwe will not revert to the local dollar despite the worsening liquidity crisis facing the nation. His statement comes amid new figures released by Treasury on Thursday showing the country’s economic woes worsening. The government’s recurrent expenditure is now accounting for 95 percent of the total revenue collected as the economy continues to falter. During the first quarter of the year, government expenditure stood at $730 million while capital expenditure was a mere $23.4 million. Speaking at a media briefing in Bulawayo, to clarify the government’s relationship with the Bretton Woods institutions – the International Monetary Fund and the World Bank - Chinamasa also said the government currently has no capacity to pay international creditors. The government has also been struggling to pay local suppliers. Former Delta Corporation chief executive, Joe Mutizwa, recently warned that more companies will be forced to close shop as the government could only service 7 to 8 percent of the total supplier bill. As a result, some in economists and even Zanu-PF lawmakers, have been exerting pressure on Harare to re-introduce the Zimbabwe dollar saying this would mitigate some of the problems facing the nation currently. Chinamasa told Studio 7 the government has no such plans. Commenting on the same issue, former Finance Minister Tendai Biti said returning to the Zimbabwe dollar will be a disaster. Meanwhile, concerned by what it says is the Zanu-PF government’s failure to resuscitate industries, eight months after winning elections, the Movement for Democratic Change (MDC) formation of former prime minister Morgan Tsvangirai is proposing national dialogue to map the way forward. Initially Mr. Tsvangirai called for inter-party talks, a move quickly dismissed by Zanu-PF, but speaking at a press conference earlier Thursday, the party’s shadow industry minister Tapiwa Mashakada said the liquidity and company closure crisis facing the country is being worsened by hostile domestic and foreign policies that discourage investors. Mashakada said the national dialogue should then lead to the formation of sector-specific clusters to revive commerce and industry. In a related development, tobacco sales have this season so far reached $300 million, compared to last year’s $280 million realised at the same period last year. Tobacco prices have been firming up since the opening of the tobacco auction floors, rising from $2 to the current $2.87 per kilogram. But Tobacco Industry Marketing Board chief executive Andrew Matibiri said he’ is still not happy with the price.