I sell medical aid for a living, and my business has been greatly affected by the obtaining liquidity problems.
Our firm started using online payment platforms, cellphone banking, Point-of-Sale terminals and Internet banking from inception – way before the liquidity constraints.
As an emerging businessman, I rely on daily newspapers to follow trends and keep abreast with changes in the marketplace. However, I now have to make do with Thursday and Sunday papers.
Certain transactions, especially informal ones, must be conducted in cash: for example; when one buys sweets, the morning paper, a loaf of bread, cigarettes, a pint of milk, etcetera. The next level of transactions take place when the vendor pays the wholesaler who then banks the money.
Thereafter, transactions are by cheque or are routed electronically to manufacturers and suppliers. However, major disruptions are impeding our business as we use hard currency which is sought after by all and sundry. I, therefore, propose reintroduction of the Zimbabwe dollar.
On mentioning this to fellow businessmen and executives, the response was incredulity and ridicule. Frankly, though, this showed their lack of general macroeconomics understanding. They reasoned that political fundamentals need to be addressed first before one talks of reintroducing the local currency.
This belief is unfounded and lacks merit, and I stand by my assertion. Central African Republic, South Sudan and the Democratic Republic of Congo have functioning currencies amid raging conflicts.
I believe our respective constituencies – the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce, Affirmative Action Group and others – should get organised and lobby Government to reintroduce the local currency at the same value guaranteed by the Africa Export Import Bank.
This, in my view, will stimulate economic activity. If need be, international bonds can be issued to raise funds and back our local currency.
I prefer this approach to paying international debts which are secondary obligations that can be negotiated and deferred until such a time our productive capacity peaks. At the moment, any economic activity undertaken in Zimbabwe is expensive while margins are low.
If the South African rand were devalued and the US dollar appreciates without altering production processes and product quality, it would be cheaper for companies in the Rand Union to produce.
On the other hand, our products and services would become less competitive. Zimbabwe would be competitive regionally if it had its own currency and devaluation of, say, 5 percent took place while 70 percent of production factors were sourced domestically.
Reintroducing the Zimdollar is the way to go. The problem, though, is people now have a tendency to intertwine such issues with political views.
I will not be dissuaded from advocating the Zimdollar.
The stories of countries in circumstances such as ours demonstrate that local currency is the winner.
- This article does not reflect the views of the medical aid society Victor Mangava is associated with.
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