Economists Urge Gvt To dollarise Economy

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By Anna Chibamu

ECONOMIC analysts attending a post-budget seminar in Harare Monday warned of a looming economic catastrophe if government fails to urgently dollarise the economy.

They premised their gloomy prediction on the notion that a presently, the exchange rate is delicately poised and ready for a near-brink tilt.

Gift Mugano said the fact that government has given civil servants a United States dollar-based annual bonuses served as proof the there is no future for the Zimbabwean dollar.

Finance minister Mthuli Ncube has on several occasions told opposition MPs in Parliament that the country would never dollarise as financial policies such as the the auction rate system being adopted were helping curb parallel market rate disparities and high inflation that have caused chaotic scenes on the market.

Finance minister Mthuli Ncube has on several occasions declared there was no room for re-dollarisation.

“On money supply, as long as government is a guarantee to the command agriculture loans and monopolise trading of grains in the presence of low recovery and they are assuming debt, this will result in increase of debt and money supply  which will drive inflation upwards.” Mugano said.

“In addition, the budget made provision for bonuses in US dollar what does that tell us? Is this consistency with the Zim dollar budget? Will this 2022 budget reinforce positive expectations after workers receive their bonuses in US dollar and next month you switch to Zim dollar,” he queried.

“The issue of US dollar bonuses to civil servants is an admission that Zimbabwe’s dollar no longer exists and the economy has dollarised. I would recommend for the minister to dollarise,” he added.

On the proposed cell phone levy, Mugano responded, “We cannot charge US$50 for cellphone. Parliament must stop this one. We are an over taxed country. Parliament fears Mthuli Ncube but the minister must be under Parliament, reporting to the legislative assembly.”

Another analyst Nyasha Kaseke said: “Budget figures are increasing (doubling) every year. This is a sign of disaster . Currency issue is the problem.”

The post-budget seminar ran under the theme ‘Reinforcing Sustainable Economic Recovery and Resilience’.