New currency: Business optimistic

THE newly introduced ZiG currency must be supported by everyone to foster price stability and economic growth, players in business and commerce have said.

This comes after President Mnangagwa on Thursday told a Zanu PF Politburo meeting in Harare that sustainable economic development could only be achieved through the use of a local currency which will stimulate economic growth and guarantee stability.

Reserve Bank Governor Dr John Mushayavanhu has also assured the nation that the central bank has enough reserves to satisfy the foreign currency requirements of all legitimate businesses and no company needed to go to the black market to pay for imports.

At the same time, the Government is working out which taxes will be paid in ZiG and will be making adjustments to regulations so that those holding the old Zimbabwe dollar banknotes will be able to deposit them without problems, even if the 21-day deadline has to be extended.

On their part, players in the business sector have expressed optimism that the newly-introduced ZiG currency and the accompanying monetary policies will yield the desired results.

In an interview in Harare yesterday, Zimbabwe National Chamber of Commerce (ZNCC) president Mr Mike Kamungeremu said from their interactions with Dr Mushayavanhu, they are optimistic the ZiG will be a success.

“We have attended two breakfast meetings in a space of three days where the Governor was present to clarify issues around the monetary policy statement and also the new currency which has just been introduced,” said Mr Kamungeremu.

“In the beginning, some members were sceptical, had a lot of questions, some were afraid, they didn’t know what to do. So, what was most critical was to relay to the Governor and his team the concerns of our members.

“I am happy to say in the end we have found each other, the members have, to a large extent, accepted the new policy, they have accepted the new ZiG. Even the Governor clarified that for us to move forward as a country, everyone must make a bit of a sacrifice.

“What is undeniable and agreed among all members is that it is in the interest of everybody that the ZiG must succeed, and we agreed that all of us will give it a chance”.

He said some of the concerns of the business community include the issue of foreign currency auction obligations, those that were on backlog and owed to members which are now being converted to a financial instrument that will mature after 24 months.

Consumer Protection Commission Chairperson Dr Mthokozisi Nkosi said they have started seeing positive signs.

“There has been a lot of confusion with consumers struggling to do some transactions but we are happy that we are seeing positive signs, especially the price stability, it looks quite promising,” said Dr Nkosi.

“Consumers who are still experiencing some challenges however, need to be patient. We are in transition; we have been assured that it will be smooth sailing. Fiscal authorities are consulting widely to get the opinions of stakeholders and if there are concerns they will be raised.

“We also want to urge those working on the technical aspects to be swift, we do not want a situation where consumers are told that they cannot make some payments because certain modes of payment are not working.

“Monetary policies are an issue of confidence and that confidence needs to be restored through efficiency, especially when doing transactions”.

Grain Millers Association of Zimbabwe (GMAZ) chairman Mr Tafadzwa Musarara said ZiG will enable the business community to make prompt

payments.

‘’The initiative is a noble one and viable. We are in the business of supplying flour and maize meal, these are commodities which must be found in each household. In as much as we are accepting foreign currency, we feel that every consumer, with whatever currency, must be able to afford our products because they form a critical part of food security at the household level.

“Our imports programme is in full swing. We primarily import from South Africa and we have now activated imports from South America. ZiG is going to promote volumes for us so that whichever currency the consumer has they can buy.

‘’Previously we could not get the foreign currency and the auction system was not efficient and now we don’t have to go to the auction system. Swift payments will be expected,’’ he said.

The RBZ has adopted a market-determined system for setting exchange rates, with the auction system being replaced by a refined interbank foreign exchange market through which commercial banks buy foreign currency from willing sellers and sell it to willing buyers, with the margins far lower than on the parallel market.

The weighted average of the rates at each bank constitutes the interbank rate.

In an interview with Zimpapers Television Network (ZTN) on Thursday, Dr Mushayavanhu was confident that the ZiG would turn the tables against the black market, as the new local currency would not crumble under the weight of the US dollar.

He allayed fears that the ZiG is now taking a battering from the US dollar, saying it is a matter of time before those with ZiG start controlling the prices.

“I do not understand why would anyone go to the black market when we have said . . . if you have a legitimate foreign currency obligation to pay be it a service, be it school fees, be it importation of goods, you will be able to get your money at your bank on a willing buyer-willing seller basis,” Dr Mushayavanhu said. He discouraged people from trading on the parallel market when they knew the true value of the ZiG.