Deputy Minister of Finance and Investment Promotion, David Mnangagwa has said the Government is in the process of developing a de-dollarisation roadmap to ensure a smooth transition to a monocurrency.
On 27 October this year, the Government enacted Statutory Instrument 218 of 2023 which extended the duration of the multicurrency regime from 2025 to 2030.
Explaining the extension of the multi-currency regime, Mnangagwa said that de-dollarisation was not going to be an overnight process. He said:
At every stage, we are consulting with the market which is not extremely big by the way.
So, you will find that all the measures that are in place are to ensure that we have a smooth transition to the Zimbabwean dollar.
The best scenario is that everybody wakes up actually desirous to use the Zimbabwean dollar without having been compelled by law, so to speak. We will allow the market forces to determine.
Mnangagwa said the extension to 2030 is meant to address the issue of lending and borrowing after reports emerged that banks were refusing to lend money in USD due to the uncertainty. Said Mnangagwa:
Conversations need to evolve into when we do go into mono-currency, how are we going to grandfather all those who have exposure in as far as loans are concerned, in as far as the pension funds, insurance and also, we have a discussion on free funds.
Again, this has to be a consultative process that encompasses everybody involved.
A common belief would be business does not want mono-currency. I think they are the biggest proponents of wanting to have local currency to increase competitiveness, but it has to be done properly and orderly. So, this is what we are doing as Treasury and as Government.
… there will be a proper blueprint that will be shared after the right consultation.
Zimbabwe switched to using the US dollar in 2009 after the collapse of the local currency during a period of hyperinflation.
Ten years later, the Government tried to revert to a monocurrency regime but this has not been successful as the Zimbabwe dollar has continued to depreciate alarmingly against other currencies.
Economists estimate that 80% of the local economy is dollarised, with the gap between the official and exchange rates continuing to widen.
More: Pindula News