Business calls for currency regime referendum

PHILLIMON MHLANGA in Victoria Falls

Business leaders have called for a referendum on the currency conundrum, which has haunted Zimbabwe for the past four years, something they hope will boast confidence in the ailing economy.

Zimbabwe has been struggling to decide on which currency reform is ideal for the country, with some suggesting joining the Rand community or adopting the United States dollars or continue with the bond notes or introducing the Zimbabwe dollar, which was ditched in 2009 due to hyperinflationary pressure.The Reserve Bank of Zimbabwe governor, John Mangudya, has even delayed delivering his 2019 Monetary Policy.

Several captains of industry, who spoke at the  CEO Africa Roundtable in the resort town of Victoria Falls today, said a vote was key to bring back confidence in the economy.

One of the many executives who spoke about the need for a referendum, Norman Mudadi, an economist and chief executive officer of Devere Group said the Reserve Bank of Zimbabwe (RBZ) was hugely to blame for the currency chaos.

“Industry is hurting over the worsening economic conditions,” Mudadi said.

“The problem we have in Zimbabwe has been the inefficiency of the Reserve Bank of Zimbabwe (RBZ). Its (RBZ) inefficiency has destabilized the market and there is need to revamp the central bank because this has been the source of the country’s problems. The central bank has been mismanaging the money and the worry is that business is suffering. We have a big problem and this doesn’t make sense. It’s a big decision (currency issue) but let the market, or the people decide through a referendum,” he added.

Kenias Mafukidze, the managing director of Alpha Media Holdings concurred with Mudadi.

“The call for a referendum from the company executives is a genuine attempt to come up with currency solution,” Mafukidze said.

“Let’s ask the market what needs to be done about the currency. It has nothing to do with political parties but for government to come up with an earth shaking decision on currency will be a big problem. This is a bigger matter, which need to be trusted,” he added.

But, Sam Malaba, the chief executive officer of Agribank did not support the idea of a referendum saying currency reforms are not done through a vote.

“We need to appreciate that we need the general public to have confidence with the currency so that there is economic stability,”Malaba said.

“But, currency reforms are managed through minimum upfront communication. So the issue of a referendum on the currency cannot happen anywhere in the world. So, let’s be very careful here, it’s (currency reforms) done through consultation and done quietly in a manner that brings confidence,” Malaba added.

Speaker of Parliament, Jacob Mudenda advised business to take advantage of Parliament.

“I am a bit worried because there appears to be no sense of introspection. Don’t just point fingers at government, but you (business) are not using Parliament to deal with your concern. If you (business) have realized that the RBZ is mismanaging our money, you have to be brutal honest with it. We have the mandate to summon the RBZ governor (John Mangudya) or the Minister of Finance and Economic Development (Mthluti Ncube). I urge you to do it or treat it as a matter of urgency not to come to me after nine months from today,” Mudenda added.

Tendai Biti, chairperson of the Parliamentary Committee on Public Accounts, said: “In my view, I think introducing a local currency is dangerous. I don’t think we have the discipline yet to run our own currency. Doing it without dealing with structural problems is a very dangerous game.

“We dollarised in 2009 but we have now done what has not been done the world over. What we did was to bastardise the United States dollar, we bastardise other multi-currencies we are using. Even when we try other currencies outside the multi-currency basket we have been using, we will still bastardise that currency. The most important currency is trust and unfortunately that currency (trust) has been missing,” Biti added.

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