THE
government is likely to adopt a dual currency system that could bring
back the
Zim dollar alongside the United States currency if the government
fails to
resolve the liquidity crisis and to convince multilateral
institutions
to lend money, an analyst has said.
Zimbabwe
ditched its local currency after being rendered worthless by
hyper-inflation
which topped 500 billion percent and adopted the
multi-currency
system dominated by the US dollar in February 2009.
It has
enjoyed an economic growth rate averaging seven percent since then
and
inflation fell to 0.86 percent in September but GDP growth is seen
slowing
to three percent this year after President Robert Mugabe's Zanu PF
party
claimed a decisive victory in the July 31 elections disputed by the
opposition.
Finance
minister Patrick Chinamasa has said the regime will continue
indefinitely
but Tony Hawkins, the head of the University of
Zimbabwe's
Graduate School of Management said the tightening liquidity in
the
economy could force a rethink and that there was always the risk that
politicians
would seek a "superficially attractive" way out to finance
campaign
promises.
"I
suspect - perhaps fear - that the government will opt for some dual
currency
option," said Hawkins in a presentation of the 2014 economic
outlook
on Wednesday.
An
International Monetary Fund (IMF) delegation is in the country to
assess
progress made in implementing the Staff Monitored Programme (SMP),
which if
successful, could help it clear $10 billion in external debts and
give it
access to new credit from international lenders although that is
unlikely
to happen soon.
"Given
the IMF forecast of a sluggish global economy and the third
successive
year (in 2014) of decline in non-fuel commodity prices,
Zimbabwe
can expect little in terms of an external stimulus to growth," he
said.
"This
means growth must be domestically-driven in an economy where the
government
budget is under enormous pressure and there is no scope for a
fiscal
stimulus."
Information
minister Jonathan Moyo recently said the Zanu PF party
election
manifesto left the door open for the return of the local currency
to
circulate along with the multiple-currency, although not in the
foreseeable
future.
The
government has adopted a new economic blue print, Zimbabwe Agenda for
Sustainable
Socio-Economic Transformation (ZimAsset) which projects a GDP
growth
of 6.1 percent in 2014 and 9.9 percent by 2018 but Hawkins said the
plan
failed to explain where the investment would come from.
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President
Mugabe told a party meeting on Friday that government expects
more
money from diamond sales after the European Union removed sanctions
on the
state-owned Zimbabwe Mining Development Corporation.
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