18 August 2009
Harare — Reserve Bank of Zimbabwe Governor Dr Gideon Gono has proposed the reintroduction of the Zimbabwe dollar anchored on gold valued by an independent body comprising all stakeholders.
He said the reintroduction of the local currency would help in addressing a number of bottlenecks the country was facing.
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Dr Gono said the reintroduction of the local unit in the manner he was proposing would go a long way in addressing unavailability of change of small denominations and coins, among other constraints.
The RBZ chief said this yesterday while giving oral evidence before the Parliamentary Portfolio Committee on Natural Resources, Hospitality and Tourism.
The committee, chaired by Nkayi South Member of the House of Assembly Mr Abednico Bhebhe (MDC), wanted to know the financial sector's preparedness in terms of introducing plastic money ahead of 2010 World Soccer Cup Finals to be held in South Africa.
The committee invited the central bank and the Bankers' Association of Zimbabwe, led by its president Dr John Mangundya, to update it on progress.
During yesterday's deliberations, bankers said they had gone a long way with preparations and international credit and debt cards would be ready by end of September this year.
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The committee, however, expressed concern at the unavailability of change, especially coins.
In response, Dr Gono proffered an array of advice that included the need for political stability, addressing infrastructural issues like availability of electricity, water, transport network, and the health delivery service system, among others.
"The financial sector might do its homework, but if other players don't play their part, the country might not benefit anything from the world soccer showcase," said Dr Gono.
He said there was need to reintroduce the Zimbabwe dollar that would be pegged against gold available.
He said those who had criticised his idea were doing so out of ignorance, as they did not understand the gist of his advice.
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"Nobody can move me from that conviction. We anchor our Zim dollar to the gold available. It will not only be RBZ, but all stakeholders. A certificate will then be issued to the RBZ on the amount of Zim dollar to be printed after the committee has satisfied itself on the value of the gold," said Dr Gono.
"You can also redeem your Zim dollar in return for an ounce of gold. Say, if you want to keep gold not cash, you can go to your bank and get an equivalent of ounces of gold to the Zim dollar you have, so we will be backing our money with reality on the ground. Such an approach is not inflationary because you are anchoring your money on productivity."
The central bank chief urged Zimbabweans to be pragmatic by "thinking outside the box".
"We can even print gold coins. The Zim dollar can then gain as it is anchored on gold. We need to think outside the box," he said.
Asked why the country had not formally dollarised or randified, Dr Gono said that would involve a number of legal and economic issues.
He said it was not possible to officially dollarise because the United States had imposed sanctions on Zimbabwe while it would be cumbersome for Zimbabwe to officially use the rand as its currency.
"If we are to randify, we will have to be members of the Common Union with Namibia, Lesotho and Swaziland whose economies are anchored with South Africa. All our policy and monetary statements would have to be submitted to South Africa for concurrence before we finally pronounce them," said Dr Gono. Initially, Dr Mangundya had said it was more expensive to import coins because transport costs were determined by weight.
"We will have to pay, say, US$100 000 to import US$10 000 worth of coins," said Dr Mangundya.