Adopt the rand to stabilise economy
EDITOR — Given the slow stabilisation of inflation, it would be wise for the government to consider use of the rand so that we have complete stabilisation of our economy. It is an open secret that the currency crisis is wreaking havoc in Zimbabwe and our closest option is for the authorities to consider adopting the rand as the main currency. This is now important more than ever before because of several reasons.
Chief among these being the fact that those who would have imported basic commodities into the country will never sell them back home at the bond note value but at rand value. This phenomenon will see the perpetuation of the parallel market in the country.
South Africa remains one of the most important trading partners for Zimbabwe. A snapshot of statistics shows that Zimbabwe imports about 40 percent of its total imports and exports about 75 percent of its total exports to South Africa.
In 2017, South Africa’s exports to Zimbabwe were almost $3 billion. In the month of February 2018 alone, the Zimbabwe National Statistics Agency (Zimstat) reported that Zimbabwe exported goods worth $216,9 million to South Africa and imported goods worth $261,2 million.
These statistics are just but one of the many reasons why adopting the rand would be good for the country while we work towards bringing back our own Zimbabwe dollar.
Using the US dollar as our main trading currency will remain a challenge since it is in short supply and beyond the reach of many ordinary citizens, let alone the amount of trade between Zimbabwe and Washington compared to Zim-SA trade.
Zimbabwe needs to look beyond the United States dollar if ever we are going to bring back our own currency. South Africa has proved to be our real brother and our all-weather friend. It is our leading trading partner and statistics are there for everyone to see.
As if that is not enough, most Zimbabweans who live outside the country are resident in South Africa. In short, without much economic background, even a layman would see the necessity of Zimbabwe formally joining the rand community.
So there we are, Zimbabwe needs to rise from the economic doldrums that it has been languishing in for close to two decades.
The country has been having currency problems for long now which should also mark the thrust while the rand helps us to reach that milestone. We need to exploit the advantages inherent in the adoption of the South African rand.
These are, but not limited to, favourable transaction costs, investment promotion, and exchange rate stability due to common currency. Since South Africa is our major trading partner, adopting the rand would guarantee exchange rate stability.
This can also double up as the panacea to the challenges exerted on the economy by money changers, who are a common sight in most of our towns and cities. S G.