EDITOR — Although a new currency and printing of new notes and coins is welcome to ease money shortages in banks, it can be a cocktail for disaster if improperly managed by politicians in the ruling party.
Money should be printed and efficiently channelled into productive sectors like manufacturing (engineering and IT), mining and agriculture including power, telecommunications and water sectors. There is absolutely nothing wrong if money is printed and directed into new and existing well-managed productive sectors as mentioned above!
The worst thing that can happen in any country is to print money to fund political activities and buy political assets by the ruling party. This way we are guaranteed of massive inflation. There is a big temptation to print money for political activities as opposed to channelling it into productive sectors.
Printing of money in Zimbabwe right now will help:
(1) make money available in banks
(2) reduce exchange disparity between bond note and electronic money such as EcoCash
(3) money demand from the black market will be reduced, making the formal market once more functional for the benefit of the generality of Zimbabweans if channelled into productive sectors mentioned above
(4) expand the Zimbabwean economy.
What the government should have done was to print higher denomination notes such as $50, $100 and not the $1 and $5 notes since money is losing value due to inflation so that people do not carry too many coins and notes when travelling or when on buying trips!
The money system is about perception, therefore if people begin to have faith in their government then they are more likely to support their currency as opposed to foreign currency. Our currency will be competitive with the US dollar if we increase productivity in the productive sectors mentioned above.
Printing of money has always been a welcome event when done by responsible authorities but unwelcome when done by irresponsible authorities!
We live to see whether Zanu PF government is responsible or not, depending on the outcomes of printing new notes and coins!