Zim a fishing pond for hard currency: VP

VICE-President Emmerson Mnangagwa (pictured) has attributed the current liquidity crunch to externalisation of money by small to medium enterprises (SMEs) as well as foreign owned companies that are shunning local banks.

Addressing members of the Confederation of Zimbabwean Industries (CZI), Ministry of Industry and Commerce officials and Zimasco employees in Kwekwe on Friday, VP Mnangagwa said most companies and small retail shops owned by foreigners were externalising hard cash from Zimbabwe and circulating it in the informal sector.

VP Mnangagwa said the Government was putting drastic measures to curb externalisation of money by small businesses some of whom were operating illegally. He said this while responding to a statement by South African Company Portnex Official Mr Frikkie Laubster that Zimbabwe was a fishing pond for hard currency (US dollar).

“As we were going round and when Laubster was explaining why we have this liquidity crunch in the country, he said Zimbabwe was a fishing pond for hard currency. So we are a fishing pond for the Southern African region to acquire and access hard currency. Therefore, we must find some methods to implement to reduce the country from being a fishing pond for the US dollar. One other measure is the introduction of bond notes. This won’t trade in other countries in the region but locally it can trade and facilitate commercial transactions. Bond notes will oil commercial transactions in the country,” said VP Mnangagwa.

VP Mnangagwa said the introduction of bond notes does not mean that Zimbabweans will not have access to the US dollars. He, however, urged companies to embrace new technologies and move with technology to increase efficiency of production. VP Mnangagwa said most companies were limping because they were using obsolete technologies and machinery and have been overtaken by time.

He said there was a need for the country to also upgrade its infrastructure. VP Mnangagwa said there was a need to mordenise the rail gauge adding that the Government had plans of constructing a railway line linking Harare and Beira through Mashonaland Central Province.

“We have a system of railway line which is colonial but now we need to integrate our rail gauge so that it interrelates with countries in the region such as South Africa, Zambia and Mozambique. We have a research committee to work out the interrelations of the rail gauge. Also we are behind in terms of the type of locomotives that we are using locally so we have to spend about $6 billion for the infrastructure and mordenise our railway system.

“We need a railway line from Harare to Beira through Mashonaland Central, about 865km. These are some of the programmes, we have to mordenise the railway line. We are targeting to put tarmac on over 4 000km of the road. Some roads are going to be widened while some will be dualised, this will improve the road networking and enhance business and make sure we catch up with other countries in the region,”

he said.