By Michael Gwarisa
CONFEDERATION of Zimbabwe Industries (CZI) President Busisa Moyo says industry has never called for the adoption of the Rand but rather pressed for more solutions to cushion industry from the prevailing cash crisis.
Moyo’s sentiments come hot on the heels of President Robert Mugabe’s proclamation that Zimbabwe would never join the rand union as was being pushed by other sections of the economy.
In an interview with The Business Connect, Moyo said there was a misunderstanding over industry’s position regards rand adoption.
“I think sometimes we misunderstand each other because what we have been calling for is increased circulation of the rand into the multicurrency. Now, by saying lets adopt the rand it will be like we are dumping something and adopting something of which that’s not what we are saying.
“Let’s face it, we have a cash crisis and we need several solutions. Plastic money is one solution. I agree that we cannot join the rand monitory union. We didn’t say we dump the US dollar and adopt the Rand no,” said Moyo.
According to earlier reports however, CZI had hinted on plans to adopt the rand during the 2017 Economic Outlook Symposium.
The CZI said it would draft some sort of a mock Statutory Instrument for ‘Randisation’.
CZI also spoke on the need to move the RTGS system so that it allows for transferring in rand without having to convert to US dollars
Presenting a paper at the symposium on Liquidity Crisis: Current Situation and Policy Options, Professor Ashok Chakravarti argued that adopting the rand was not complex as Zimbabwe was “very much part of the South African economy”.
“They (SA) are our major trading partner and that is quite adequate and it is normal for a country with such a large integration with another country to accept the currency of that region. It is part of what we call optimal currency theory in economics and it is something that is viable.
“Countries monetise and demonetise, they change their currencies, India for instance has demonetised the 1 000 rupees note and replaced with 500 rupees.
So adopting the rand is very simple. You fix the exchange rate today and you redenominated everything in the Zimbabwean economy in value. Redenomination is no issue at all,” said Prof Chakravarti.
South Africa is Zimbabwe’s major trading partner with almost 40 percent of imports from that country.