“Continued Use Of US$ For Domestic Transactions Kills Confidence,” Chinamasa

Former Finance Minister, Patrick Anthony Chinamasa, (P.A.C) has said that continued use of the United States dollar kills the confidence of Zimbabweans in the local currency. Speaking in an interview with The Sunday Mail Deputy Editor, Lovemore Ranga Mataire, (L.R.M), Chinamasa said that foreign currency was only good for imports. Below are excerpts from the interview.

L.R.M: All that you said Cde Chinamasa could be right but you are aware that the success of any policy is dependent on confidence. How do we build confidence for the public’s acceptance of our local currency given the history of the 2008-2009 hyperinflation?

P.A.C: You cannot build confidence by doing the wrong things. The wrong thing is to continue using US dollars for transacting in domestic business; that is wrong. It came about because of necessities but cannot grow our economy. For our economy to grow, we need to use foreign currency only to import essential commodities that drive growth in the economy.

In this country, we are not an oil producer, so we need foreign currency to buy fuel, which currently is being used to buy “mazhanje”. You can’t have an economy of that nature. We need electricity because we are not producing it sufficiently.

Ultimately, take this from me; as a country we earn more foreign currency than a lot of other countries. I understand that we were hovering around US$2-3 billion in terms of our foreign exchange earnings but the figures that came out last year put it around US$5 billion, which indicates that there has been an increase in production.

So the issue is about how do we use that foreign currency. We cannot allow it to be in people’s pockets. We must do like what other countries do. Foreign currency belongs to the Central Bank and must be apportioned to sectors according to their importing needs- like mining, manufacturing where most of the equipment is obsolete. We need to completely retool and for that we need foreign currency.

Similarly, for agriculture to thrive, we need mechanisation and all that needs foreign currency. That is where our foreign currency should go and not to buy non-essential things. We need proper management of that resource because it is hard earned. Which are the industries earning it/ essentially, there are five or six commodities which earn foreign currency. Gold, tobacco, platinum, chrome ore, nickel, diamonds, all hard earned. Everybody selling in the streets has some foreign currency in his pocket; what is it doing there? Individually, it sounds as if it is insignificant but collectively, it is what can basically save this economy and spur it to greater growth.

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