‘Dedollarisation roadmap bad’

RYAN CHIGOCHE

The decision by the Reserve Bank of Zimbabwe (RBZ) to extend  the dedollarisation roadmap is bad for the economy, analysts have warned, amid calls for an alternative path which inspires confidence.

At a recent Confederation of Zimbabwe Industries symposium  held in the capital, RBZ governor, John Mangudya told delegates that it was going to take longer than the initially targeted time to achieve full  dedollarisation.

He said the process was now  going to take at least seven years, from the initial target of five years.

But, the University Of Zimbabwe economics lecturer, Moses Chundu said since the dedollarisation policy was failing, it was high time the government desist from forcing a currency on people.

‘’The issue of shifting moving targets is not good for our economy. We need to take responsibility when policies fail and at times apologise for the failure and based on that realisation announce an alternative path that inspires confidence. Consistency and stability is key in policy discourse. The time it takes to fully de-dollarise is a function of the credibility of policies being pursued to achieve the same.  It all comes down to confidence,” Chundu said.

He emphasised that confidence building in the local currency must take the centre stage whilst using a free multi-currency system.

‘’Money is nothing but an ‘I owe you’ note whose value depends on the credibility of the issuer.  So instead of statutory instruments that force the RTGS down people’s throats, it should come down to confidence building measures like in any other relationship where trust has been lost. It’s better to start working on those measures first whilst in a free multi-currency mode,” Chundu added.

As Mangudya has maintained that dedollarisation was the only route to achieve economic growth he squashed any hopes of redollarising saying Zimbabwe has to use its own currency.

SME Association of Zimbabwe CEO, Farai Mutambanengwe,  said , the mismanagement of the local currency has made the de dollarisation task difficult, although it was important to use the local currency for the economy to grow.

“It is important for the economy to use the local currency because for you to be able to grow your economy you primarily have to have your own currency. You need to have control over your monetary policy in  order to influence the growth trajectory. If you are using an external currency you are not then able to influence your growth,” he said.

In 2020 the Treasury announced a de-dollarisation roadmap detailing how the economy will transition over the period.

The de-dollarisation roadmap seeks to abolish payment of salaries in foreign currency by 2024. The roadmap also suggested that all payments for goods and services will be in local currency by 2023.