Accessibility links

Breaking News


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.

Zimbabwe Dollar Coming Back ...
please wait

No media source currently available

0:00 0:07:51 0:00

FILE: A man in Harare holds bondnotes issued by Reserve Bank of Zimbabwe, Oct. 15, 2018. The introduction of bond notes - a currency Zimbabwe started printing two years ago to ease the situation -- has not helped. (C.Mavhunga/VOA)

HARARE (Reuters) - Payments to 200,000 retirees on Zimbabwe’s public pensions scheme could be delayed this month, the national social security agency said, after a foreign currency dispute erupted between local banks and a payments software vendor.

Zimbabwe is battling an extended foreign currency crisis which has affected key imports such as electricity, fuel and medicines. Many firms with foreign ownership are also struggling to repatriate dividends to non-resident shareholders.

Its National Social Security Authority, a mandatory public pension scheme, said on Thursday it could miss a June 13 deadline for paying its members because a software platform it uses to make the disbursements was demanding payment in foreign currency.

“Payouts that were due on (June 13) might be delayed as the provider of the payment platform used by the banks is demanding to be paid in foreign currency, failure of which it will suspend services to them,” the authority said in a statement.

An aurhority spokesman said the payment platform was run by London-listed investment company Cambria Africa. One of the company’s subsidiaries, Payserv Africa, provides payment solutions to banks and 5,000 corporate clients in Zimbabwe.

On Wednesday, it announced it had suspended services over non-payment of foreign currency fees.

“The Company lost U.S. $170,000 providing services to banks in March and April 2019. Banks collectively owe Payserv Africa over U.S. $470,000 for over 4 million transactions concluded since 1 May 2019. The company cannot allow further accumulation of possible losses,” Cambria said in a statement.

It said Zimbabwean banks had frustrated its attempts to maintain the U.S. dollar value of its services following the devaluation of its currency, the Real Time Gross Settlement Dollar (RTGS) dollar, on the interbank market.

The Bankers’ Association of Zimbabwe, which represents the sector, was not immediately available to comment.

In February, Zimbabwe ditched a discredited 1:1 dollar peg for its dollar-surrogate bond notes and electronic dollars, merging them into the lower-value transitional currency called the RTGS dollar.

The central bank, which has tightly controlled foreign currency payments since May 2016, has moved to relax its hold, with most external payments now going through the banks and using a market-determined exchange rate.

The RTGS dollar has slid from a starting position of 2.5 RTGS dollars per U.S. dollar on Feb. 25 to 5.91 RTGS dollars to the dollar on Thursday on the official interbank market. It was trading significantly weaker, at 8.7 to the US dollar, on the black market on Thursday. (Reporting by Nelson Banya Editing by Emma Rumney/Mark Heinrich)

Load more