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Zimbabwe Would Consider Adoption of S. African Rand as Currency - Minister

  • Chris Gande
  • Gibbs Dube

Zimbabwean Minister of Industry and Commerce Welshman Ncube told an African forum on Tuesday in London that the country would consider adopting the South African rand as its currency and joining other countries in the loose rand monetary union.

Early this year Zimbabwe adopted a monetary regimen of allowing multiple hard currencies to circulate while withdrawing the debased Zimbabwe dollar from circulation. The move, led by consumer and business currency preferences, stopped massive hyperinflation in its tracks and resulted in stronger flows of imported essential goods into the country.

But without a currency of its own Zimbabwe is experiencing liquidity shortages, and many in the country, especially in rural areas, do not have ready access to hard currencies.

Ncube said Zimbabwe can't continue indefinitely with a multi-currency regimen, so it would look at joining Namibia, Swaziland and Lesotho in the Southern African rand monetary union where the rand circulates alongside local currencies.

Elsewhere, Finance Minister Tendai Biti repeated that the Zimbabwe dollar isn’t coming back any time soon, rebutting President Robert Mugabe’s recent contention that it should be restored for the benefit of rural dwellers shut out of hard-currency markets.

Director Godfrey Kanyenze of the Labor and Economic Research Institute of Zimbabwe told reporter Chris Gande of VOA's Studio 7 for Zimbabwe that reintroducing the Zimbabwe dollar does not make sense with the economy barely initiating a recovery.

Elsewhere, seeking an infusion of foreign capital, senior Harare officials will make the case for investing in Zimbabwe to international business people in a two-day conference beginning on Thursday in Harare. The gathering will also try to encourage Zimbabweans in the so-called diaspora to identify business opportunities in their homeland.

Economic Planning and Investment Promotion Minister Elton Mangoma told reporter Sandra Nyaira of VOA's Studio 7 for Zimbabwe that the conference aims to position Zimbabwe as a destination for foreign direct investment in Southern Africa.

At the same time, the Zimbabwean government is hoping to raise more than US$50 million by offering diaspora bonds to millions of nationals living abroad. But analysts say such a venture could meet with initial skepticism and fears such capital might ultimately bolster the former ruling ZANU-PF party of President Robert Mugabe, now sharing power with the Movement for Democratic Change formation of Prime Minister Morgan Tsvangirai.

But analysts say many Zimbabweans abroad, who collectively remit some US$500 million to the country each year, will probably buy bonds if the political situation improves.

London-based political analyst Bekithemba Mhlanga told reporter Gibbs Dube that success in the proposed bond issue will depend on the anticipated return on investment.

More reports from VOA's Studio 7 for Zimbabwe...

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