By Staff Reporter
Mutare: Zimbabwe appears to be grappling with many problems but the solution lies in addressing few economic fundamentals, Zimbabwe Coalition on Debt and Development (Zimcodd) senior economist Tafadzwa Chikumbu told a women and youth meeting held in the eastern border city recently.
“Zimbabwe appears to be having many problems but at the core are very few fundamentals that need to be addressed and everything else will fall into place,” said Chikumbi.
Chikumbi said the root of the problem was over dependence on imports, something which renders foreign currency superior to the local currency.
The ZIMCODD economist said trade in local currency also unmasks the truth that most of businesses are still relying on the black market for their foreign currency.
“A distorted economy breeds opportunists as is happening in Zimbabwe currently…90 percent of goods in our shops are imported. So foreign currency will continue to wield more power over the local currency.
“Although Zimbabwe banned the use of multiple currency with all transactions to be done in the local RTGS dollars, international aid organisations, mining companies and other businesses are still allowed to trade using the greenback,” he said.
“Prevailing economic distortions have rendered the country a fertile breeding ground for opportunists who have set up businesses out of trade in local notes and coins against mobile money and bank transfers.”
Trade in the different units of the local currency has seen some shops accepting notes only for even half the price the same products are fetching in shops that accept electronic payments.
Delays in bringing in a fiat currency, which the finance minister said is set for introduction before the end of the year, is being blamed for the prevailing distortions in the market.
“What we are all seeing with trade in notes and coins means that many businesses continue to rely heavily on the black market,” Chikumbi said.