West met their match in Putin’

…Zim president to copy Russia's currency strategy

HARARE - Zimbabwe’s President Emmerson Mnangagwa is trying to emulate Russian President Vladimir Putin in his attempt to revive Africa’s worst performing currency.

Mnangagwa’s administration may announce plans as early as this week for government departments in Zimbabwe - under US sanctions for economic mismanagement and human rights violations for the past two decades - to show “high preference” for the Zimbabwe dollar in the payment of services, according to Persistence Gwanyanya, a Harare-based economist and member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee.

“We are going to see a significant shift by government toward our own currency,” Gwanyanya said on Sunday in an interview by phone.

“We are drawing lessons from Russia, one of those is that heavy dependence on US dollars is not good. We want to try and reflect some of these geo-political issues in our local economy.”

Russia’s attempts to bolster the rouble by demanding payment for gas and oil in its own currency along with strict capital controls has sheltered the rouble.

Putin resorted to the measure because of heavy sanctions for his war in Ukraine. But Zimbabwe’s attempts to shake off its dependence on the US dollar may be tougher. Greenbacks are used to pay for almost everything from food to fuel, medicines and road tolls.

Workers including teachers and bank employees have since the start of this year demanded salaries in US dollars to meet living costs pegged in foreign currency.

Zimbabwe had a trade deficit of $1.2 billion last year, according to data compiled by Bloomberg. That compares with a $203 billion surplus for Russia in the same period

Even Mnangagwa’s government has previously come under criticism for undermining its own currency in favour of the US dollar, paying its workers their bonuses in foreign currency last year.

Under the new measures, payment using local currency will increase for services including obtaining passports, paying import duties and taxes. – BLOOMBERG NEWS.