Zanu-PF pushes for return of Zimdollar

Zimbabwe President Robert Mugabe is pushing for the re-introduction of the local currency four years after it was scrapped due to hyper inflation.

Zanu PF passed the resolution at its annual conference held in the city of Gweru at the weekend but the suggestion was immediately thrown out by Finance minister Tendai Biti who said confidence was still too low to re-introduce the Zimbabwe dollar.

According to the resolution, the party wants to push for the re-introduction of the local currency and adoption of other currencies including the Chinese yaun as legal tender.

“The party would instruct government to work out modalities for the re-introduction of domestic currency alongside the multi-currency system in order to address the current liquidity crisis and to enable our people to carry out their transactions,” the resolution reads one of the Zanu PF resolutions.

Zimbabwe dumped the local currency in 2009 after it was ravaged by world record breaking hyper inflation.

A basket of multiple currencies dominated by the United States dollar and the South African rand were introduced.

But Zanu PF wants the US dollar to be gradually replaced by currencies from the five newly industrialised countries Brazil, Russia, India, China and South Africa.

Zimbabwe and the United States have frosty diplomatic relations.

Zanu PF accuses Washington and other Western countries of sabotaging Zimbabwe’s economy.

The introduction of multiple currencies stopped Zimbabwe’s decade old economic decline and ended endemic food shortages.

Mr Biti speaking at the University of Manchester in England at the weekend said the slow recovery of the economy was delaying the re-introduction of the local currency.

“As I speak, our imports are about $7 billion and exports about $3 billion – so there is a ration of 3:1.

“That essentially means we are running a very dangerous current account,” he said.

“Surely, you can’t return the Zimbabwe dollar when you don’t have the economy to sustain it.

“Your local currency is a relationship between your imports and exports and if you have this skewed deficit in your current account, in your balance of payment position, in your capital account, you don’t have the economy to sustain a currency.”

Mr Biti is from Prime Minister Morgan Tsvangirai’s Movement for Democratic Change party which formed a coalition government with Zanu PF in 2009.

Critics say Zanu PF is eager to see the return of the Zimbabwe dollar so that it can control the printing of the currency.

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