The first order of business is to have a debt resolution so that we can restructure our debts with the IFIs – mainly the World Bank, European Investment Bank and African Development Bank. We have started a process working with the creditors – the IFIs as well as the Paris Club partners.

Dr Akinwumi Adesina, President of the African Development Bank, is helping lead those discussions. We have conversations about the key reforms that will be required for us to have a meeting of minds with the creditors, especially with the IFIs; and then we can get back onto a staff-monitored programme with the IMF.

Then, upon completion of that, hopefully [we can] identify a sponsor – in the language-speak of arrears clearance – to assist us in meeting the bridge financing that is needed to clear arrears for both the AfDB and the World Bank. That is the road map.

We’re looking at the next 18 months for that process to be concluded – but we have to stay focused.

Currency volatility has attracted a lot of attention. Can you give us a bit of background on the currency issue?

When we came into government in 2018, we found a situation where Zimbabwe was using the US dollar as its domestic currency, which meant that Zimbabwe had no monetary policy. You cannot control the printing of US dollars that are being used in your country.

The only tool we had was fiscal policy.  We had to re-establish monetary policy. I reintroduced the Zimbabwe dollar in February 2019 as a new currency but Zimbabweans still had a bitter feeling about the domestic currency, since many of them had lost their life savings through the crippling inflation of 2007/2008.

We realised that within six months or so, both the Zimbabwe dollar and US dollar should be allowed to circulate – a dual currency regime.

Why do we need the US dollar to continue circulating?  Because we don’t have access to easy offshore credit lines. Allowing the US dollar to circulate is partly a solution for dealing with the few credit lines that we have.

Exogenous shocks have brought with them new issues and as a result created some volatility. But what I can say is that the new currency has given our industry some competitiveness and we see this in terms of the goods on the shelves being manufactured domestically. That was intentional and, as I mentioned earlier, we have also been running a current account surplus for the last four years.

We make sure that we maintain that tight fiscal management and make sure that the deficits don’t run away and become a problem that may lead to currency volatility.

Inflation in the country has been caused in part because of external factors and also because of a volatile currency. When we have episodes of currency stability, inflation drops quite sharply so we now know that currency stability is the major key to inflation control in Zimbabwe.

Are you saying that the volatility is not based on fundamentals?

It is driven by speculation; it is driven by the search for arbitrage opportunities by private sector players. The fundamentals are actually strong in the sense that we have basically zero fiscal deficits, monetary policy is quite tight and we try to tighten liquidity. The speculators are always there to take advantage of the situation.

The lithium ban came as a little bit of a surprise. We understand the rationale behind it but it seemed like a knee-jerk decision?

The government has always seen beneficiation as critical for sustaining economic growth, creating jobs and so forth. Lithium is a mineral of the future. In terms of renewable energies, it is lithium batteries that drive green cars.

Zimbabwe has one of the largest deposits of lithium in the world. We are currently the fifth biggest producer, and alongside South Africa the biggest in Africa.

Beneficiating lithium is a good thing.  We are saying that, you cannot export raw unprocessed lithium but if you build a concentrator it can be exported as a lithium concentrate.

Better still, if you build a lithium battery manufacturing plant, hallelujah!

That is the long-term aim. This policy has been [well] received. Why can’t Zimbabwe be the place where lithium batteries are manufactured? At least, let’s start by exporting concentrated lithium as a way forward.

Within weeks of announcing that ban, within days in fact, we had offers from businesses telling us they wanted to invest in lithium concentrators and manufacturing plants. The response has actually been positive from the private sector rather than negative.

This is election year in Zimbabwe. What does that mean from an economic perspective?  

In some areas there will be delayed investments. That’s what investors do, they watch and see. At the same time, there will be high expenditure because you do see increased spending around election time in areas such as infrastructure, transportation, food distribution and so forth.

You do expect heightened activities in some areas but maybe less in some areas. Overall, these two will balance out. I don’t expect our expectations to change. We are still expecting growth to be over 4% at least.

You cited some of the policy changes that you’ve undertaken. Can we expect more policy changes over the next year?

Not really. We’ve done a lot of reforms over the past four years. We don’t expect too many major shifts really. I think we have a steady ship and we want to keep it steady but of course, some of the policy changes are a response to global shocks. If you get an oil price shock you have to respond to it. The idea is to just be alert to shocks and have some reserves through which one can respond to them. That is really the approach we are taking.