RBZ Governor, John Mangudya, has called on Zimbabweans to support the local currency and reject the idea of full dollarisation. He said the country does not have enough foreign currency to sustain a dollarised economy and needs to reserve it for critical imports such as electricity.
Speaking at a mining conference in Victoria Falls, Mangudya said Zimbabwe has about US$2,4 billion in deposits, but half of it is used by banks to fund their clients who are exporters, mainly in the mining sector. He said the mining sector contributes over 70 percent of the country’s exports and helps revive the manufacturing sector.
He said it was wrong to assume that the country generates enough foreign currency to dollarise because the money belongs to the exporters and not to Treasury. He said only a few individuals and exporters are pushing for dollarisation and moving away from the multi-currency system.
“Because you are consistently exporting, people say we can now dollarise. This money is not ours — it belongs to the exporter,” said Mangudya.
“It means that we have no capacity to dollarise because already we have a shortage.”
The RBZ Governor said the solution was to build confidence in the local currency and use it for local transactions. He said the Government has allowed partial use of foreign currency as a transitional measure until 2025, but the long-term goal is to de-dollarise.
He said the Government was concerned about citizens’ lack of confidence in the local currency and condemned businesses and individuals who inflate prices of goods in local currency to discourage its usage.
He said there was a need for stakeholders to save foreign currency for importing electricity and other essential services.
“The country has no sufficient foreign currency to dollarise. As you heard Zesa cannot import enough electricity because there is no foreign currency,” he said. “What it means is that what people are asking for, we have no capacity to dollarise. We have more than US$2,4 billion in our deposits and of those deposits, US$1,4 billion is in banks as liquidity for them to fund their customers,” said the Governor.
