Zim needs to adopt a stable currency

A functional and stable currency is the solution to the currency problems and confidence drought that exist in the country, Akribos Capital Incorporated partner, Tawanda Mazorodze told delegates at the Investment Professionals Association of Zimbabwe (IPAZ) Annual conference in Nyanga on Friday.

The 2023 annual conference was dubbed “Rising in the Chaos and Beyond”.

In an open debate session “Currency choices, debating on the path forward for Zimbabwe” , Mr Mazorodze said the way forward for Zimbabwe is to ride on a stable currency and not focus on the name of the currency.

“We are more worried about the stability of the currency than the name of the currency. If the currency is stable and businesses can plan then this country can work,” said Mr Mazorodze

He said for a currency to be called a currency it has to have the ability to trade against other countries.

“Dollarization is not actually our problem or our solution. We do not need a US dollar but we simply need a currency.

“We could call it the dollar, the rand or give it any other name but what we need is a currency.

He gave examples of periods where Zimbabwe had a series of currency crises stressing the point that economic growth would shrink and inflation would soar and when the country had a stable currency economic growth would go up and inflation would ease.

“The solution was not the US dollar, but the solution was a stable currency,” he said

He also said economies that generally perform well tend to have better currencies in terms of strength.

“So in other words a currency is like the share price of an economy and if the economy is doing well in the short term we expect the share price to go up hence there is also a need to improve on the economy’s performance.

In the same vein Fincent Securities Director Rufaro Zengeni shared an almost similar sentiment saying the private sector and the government are not having an honest conversation for the two parties to build trust and work together.

“The primary challenge that we have in Zimbabwe between the private sector, treasury and the central bank is that we are not having an honest conversation.

“There are other countries in the world that have high inflation, that have currency challenges, but the market knows the inflation figures and they discuss the issues on that particular currency,” said Mr Zengeni

“Government and the private sector must sit down and discuss the issues with our currency and as long as they do not sit on one table and discuss the issue of trust will not be resolved.

“As long as we are not being honest with each other, whether we decide to dollarize or adopt any other currency, the private sector, individuals, corporates,” he said.-ebusinessweekly