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'New Zimbabwe Currency Needs Fiscal Discipline' to Avert Economic Decay

FILE - A woman holds a 100 trillion-dollar note in Harare, the highest denomination printed by the Reserve Bank of Zimbabwe.

A Zimbabwean businessman, who is also in President Emmerson Mnangagwa’s Advisory Council, says the government has assured local entrepreneurs that the local currency set to be availed in the country before the end of the year won’t be printed in billions like the now defunct dollar, which was dumped in 2009 due to historic hyperinflationary rates.

In an interview with VOA Zimbabwe Service, Busisa Moyo, noted that Zimbabweans are still traumatized by the fall of the local currency and its reintroduction may unsettle them.

“It is absolutely true that Zimbabweans went through trauma with regards to currency. It was a traumatic experience and it is absolutely true, it cannot be denied the level of inflation, the problems we had with currency, extensive printing of the currency, that cannot be under emphasized. It’s still an issue that we should make sure, going into the future, does not happen.

“How is that … Government needs to have fiscal discipline and we have seen the current government since January has been running surpluses. It is key. A lot of people will say, well, how can you be running surpluses when hospitals don’t have this and that and so on. Well, in order to deserve have a currency you must show that you have fiscal discipline. You don’t spend more than you are bringing in as government. And government has demonstrated this for the last six months or so.”

Moyo, who was speaking as a businessman and not representative of the president’s Advisory Council, said if the trend continues that would bring confidence to business executives and locals.

“The last government was running deficits of 20 percent, plus 20 percent. You cannot introduce a currency in that environment. So, we can only go by what Minister Mthuli Ncube has done which is to reign in fiscal expenditure and to control expenditure, that’s what leads to money printing.

We will be watching, there are no guarantees. The only thing we can guarantee is that we will be watching that if we start running excessive surpluses over long periods that is a tell-tell sign that we are going back to the same 2008. As long as we are hearing that there are surpluses then we are on good ground.”

He said it is necessary to have a local currency in order for Zimbabwe to produce goods to sale in various national and international markets.

Critics say the only alternative for Zimbabwe is to adopt the rand even if President Mnangagwa says the South African government made too many demands for the country to be accommodated in the Rand Monetary Union.

President Cyril Ramaphosa’s government has not yet reacted to these claims.

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