Governance and strict policies, mono – currency enablers

By Varaidzo Zhakata
ECONOMIC commentators have opined that it would require superior governance, as well as, strict policies for the smooth implementation and use of the mono – currency in Zimbabwe.

This assertion by economists comes in the aftermath of the Bankers Association of Zimbabwe’s (BAZ) claim that the country’s highly informalized economy has made it difficult to enforce mono – currency in the country.

According to analysts, there is a dire need for the implementation of good cooperate governance, strict and regulative policies, and other important measures that aid in enforcing a mono – currency.

Mr. Conwell Muzhanye, a renowned economist, told The Business Connect that the prevalence of the parallel market, throughout the country, is another factor that can deter the effectiveness of the mono – currency system in Zimbabwe, as it fuels escalated depreciation of the Zimbabwean dollar, hence forcing people to opt for the multi-currency system.

“Government has to ensure transparency and accountability in the economy by doing away with catastrophic activities that fuel Zimbabwean dollar to the black market because those who have the Zimbabwean dollar on the black market will simply determine the course of the economy, thus causing a pandemic of problems to the enforcement and adherence to the mono currency,” said Muzhanye.

Another prominent economist, Mr. Vincent Musewe added that inflation needs to be contained, hence allowing the buying power of the Zimbabwean dollar to remain afloat.

“Inflation should be managed to ensure the purchasing power of the currency is not deteriorating because if its purchasing power is decreasing, with time, people will not want it,” highlighted Musewe.

The issue of formal banking also came under scrutiny. Musewe also added that the circulation of money needs to be regulated and people should be assured with such certainty that if they decide to bank their money they will be able to get in the form which they deem fit or, RTGS or cash.

Musewe also highlighted that production is essential to sustain the mono currency system because importing a lot of commodities will consequently attract prices being pegged in foreign currency, like what is currently taking place in Zimbabwe.

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