'Zim abusing, devaluing US dollar'

HARARE - Zimbabwe is abusing the United States dollar and has effectively devalued the currency due to distorted pricing bordered on the hyperinflationary period mentality, Finance minister Patrick Chinamasa has said.

Following galloping inflation — topping 231 million percent — the country abandoned the Zimbabwe dollar to adopt a multi-currency system in 2009 — dominated by the greenback.

However, the profiteering attitude lingered on with most goods basically priced at $1 and above.

“We migrated from the Zim dollar to the US dollar and we migrated with the hyperinflation mentality into a US dollar environment,” Chinamasa told the press on Tuesday, adding “as a result we devalued the US dollar”.

The Treasury chief said prices in Zimbabwe were too high.

“Any visitor from America is shocked that a 300ml Coca Cola costs a dollar in Zimbabwe.”

“Whether we are talking about ... mushroom on the road costs $1 and if you buy mazhanje (wild fruit) they cost $1. We need to conceptualise what this means. Somebody goes to the forest and picks up something and sells it for one dollar. So this is a problem,  hopefully it will be attacked by the measures (curb on parastatals’ bosses salaries) that we have taken.”

Reinforcing Chinamasa’s argument at the same event, Information minister Jonathan Moyo said “Zimbabweans need to question themselves what the real value of the US dollar is”.

“As a nation, we need to think how much is a dollar worth,” he said.

“For someone to seriously suggest that $6 000 is not a lot of money, I don’t think it is correct. This is an issue that we need to collectively engage on,” he said in relation to government’s move to slash parastatal bosses’ salaries.

Chinamasa added that Zimbabwean entrepreneurs should use the weakened rand as an opportunity to import machinery from South Africa.

Comments (17)

Hon. Minister there is need to investigate why the situation is like that. The truth of the matter is that there were no coins (even up to now). We understand the coins which were brought in the country had to be returned. Its not that the coins were not required but that the Banks charged commission. This is where the GVT should have intervened. The coins could have been released without the need for clients being charged. The GVT should have chipped in and absorbed the charges. More so when the clients lost through the conversion from Zim$ to multi-currency. The GVT should have facilitated the availability of US coins too.

Charamba - 20 March 2014

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Boreholes - 20 March 2014

But I once said it although it was about amounts women were demanding for maintenance, people were demanding for law suits, fines which were handed to people by both the municipality and traffic police, they don't consider the value of the US dollar. Now it went to salaries. I remember some biscuits which are now 50 cents used to sell for 5usd until we had imports they suddenly went down to a $1 before they went down again to 50cents. True Chinamasa these people have abused the USD.

Maita Manyuka - 20 March 2014

Zimbabwe the beautiful, a nation that prides its self for high literacy continues to fail to contain its own greed. We lie ourselves as if playing a game of world wide "make-believe", seriously as long as the greater part of the economically active get by through corruption one way or another the perceptive view of the dollar is distorted. From the police on the highways, receiving $3 of paid homage, to the underhand million dollar bribes in multinational offices, sure there is no redemption for this nation. This cancerous evil will be the undoing of many generations of this nation. We must begin now to address this matter and spare the rising generation a tragic plight. Not only will they need to know the value of honest income, but also a working healthy economy to work in and for. We too need moral high-ground to begin early to foster principled lifestyles for for them. Our government which so far has our great undoing needs to decide that enough is enough, and clean-out our economy, we need to spring clean our institutions, we need an independent task for with the necessary muscle and sword to tear down corruption at all levels of society in Zimbabwe even if we have to get external help.

Tsepang Nare - 20 March 2014

The number 1 inflation driver is fuel, a pet coke or a loaf bread costs a dollar simply because transport cost is high. Am not denying what the other comments have stated but the Government seriously needs to consider the cost of fuel as we compare our pricing with the rest of the region. We are land locked but that does make our fuel or anything we import double as expensive. Thank you.

ndini zvangu - 20 March 2014

Why don't we mint and print our own money instead of using currencies from the imperialist countries? Try the Chinese yuan and yet the Chinese are busy exporting the US dollar to their native country. Now some of us realize that our country cannot exist as an island. There is need to be friends even with those who you consider 'our enemies.' Ordinary citizens will die suffering whilst we laud those in leadership as saints. Yet they will be busy eating all the cream and meat and leaving carcasses as left-overs. They will pretend to cry with you in public and yet their dogs and cats eat far much better food than us. They are flying kites in order to distract people from the corruption scandals.

tomasi ndofeni tohwi - 20 March 2014

we need to start by introducing our own coins which are to be used together with the US and other foreign currency. only need to introduce coins not notes then when our economy improves then we print notes. this is only a temporary measure to curb the shortage of change and coins in this running period until the economy booms.

Dzvombi - 20 March 2014

Point of correction, 300ml coke is still 50cents.

retired officer - 20 March 2014

Chinamasa is very right for once. The dollar is too devalued and is now a useless currency. It should start with slashing all wages of civil servants to about $240 for a qualified teacher and the rest will follow.

Mutengesimukuru - 20 March 2014

Govt is as guilty as everyone else. Passport fees, the cost of motor vehicle number plates, import duty, PAYE,, cost of fuel and various got fees are too high. ZIMRA penalties, traffic fines even for a minor offense are toohigh if you compare with other countries in the region. Govt should lead by example.

Magura - 20 March 2014

Mutengesimukuru you are sick. Why slash techers salary when they have suffered so much already. you are heartless and thoughtless

ndukwana - 21 March 2014

I agree totaly with the minister, that the USD is not treated with the respect it deserves in Zimbabwe. This due to the robbing mentality that was brought about by the hyperinflation experienced ealier. However there is need for CZI to come up with a solution to this daylight robbery that the Zimbos are subjected to, day in day out Someone is definetly making a killing..

mambo - 21 March 2014

All your comments are very correct but we need to look at what could be causing the high prices.Generally the cost of doing business is very high in the country.Look at the rates,electricity bills,operating licences from our municipalities.All these charges are too high hence causing the final prices of goods and services high.A relook at all these factors will help a lot in attaining realistic USD prices.

PMK - 21 March 2014

We also need to look at the Internet costs in Zimbabwe. In other countries for $20 you get unlimited bandwidth, and unlimited downloading for a whole month. Yet here in Zim for $20 the most you get is about 1 gig of data. That in my view is daylight robbery. Something needs to be done. The Telecoms companies are milking us.

Anonymous - 21 March 2014

true minister.but some of these pricess yu know better for instance duty charged on vehicle imports at zim boarders.ndoopazvinotanga ipapa kuti hurumende inosiya zvakadaro coz they gain out of it.

thunder - 21 March 2014

The problem is not economics its attitudes. Many Zimbabweans during the Zim $ era esp in 08/07 became dealers in one way or the other. And they got used to ma 1000% profit margins. Now they still have mentality of trying to maximise profit in one transaction instead of trying to maximise transaction volumes. Banks charge $5 a transaction. Vendors sell tomatoes for $1 for 3,etc

wezhira wezhara - 22 March 2014

Mutengesimukuru has the issue back to front. It should start higher up with top management and the rest will follow. The world over CEOs' salaries increase exponentially while the ordinary workers get minimal increments. Civil servants, during the life-span of the GNU earned in the region of $240 and it had zero effect on the economy/inflation/value of the US dollar. Teachers are probably the least paid among professionals. raf

remedio fernandes - 22 March 2014

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