Introduction of coins a huge relief

HARARE - On my way to watch the One Wallet quarter final tie between Dynamos and CAPS United at the National Sports Stadium, I stopped to buy a cob of roasted mealies (chibage chakagochwa).

I was running out of time as the game was 20 minutes away from kick off.

I gave the vendor a $1 note for the cob but he insisted on giving me two because he did not have change.

An argument ensued. I insisted on having one cob and my change of 50 cents.

On the other hand, the vendor was determined to give me two cobs and pocket the $1.

The game was now left with five minutes to kick off and I ended up accepting two cobs although I had no use for the other one.

Yes change, is a very problematic issue since Zimbabwe started using the multi-currency system in February 2009.

Thanks to the Reserve Bank of Zimbabwe (RBZ) governor John Panonetsa Mangudya, the issue of change is now going to be a thing of the past.

Mangudya presented his maiden Monetary Policy Statement (MPS) last Monday in which he made the right calls.

A month before he assumed office, writing in this newspaper, I also highlighted the five things that Mangudya needed to do to instill confidence in the banking sector and the economy.

The five things were; increasing foreign currency deposits, restoring vibrancy, plugging exports proceeds’ leakages, restoring Lender of Last Resort function and strengthening supervisory role.

The governor dealt with these and made one big call to bring “decency” into the economy.

Mangudya announced Zimbabwe is set to introduce a new regime of “special coins” indexed at par with the United States coins by December.

The coins, which are being imported, will be introduced as a medium of exchange and are aimed at augmenting currencies in circulation especially on change. “Indeed, they would be convertible just like the notes,” Mangudya said. “It stood to reason that we need the special coins to be the divisibility units of the US notes, as such, the special coins would need to be at par with the US cents.

“Divisibility is one of the most important characteristic of money. The rand coins are also being imported to augment the available stocks within the economy,” said the central bank.

The special coins denominations will range from one cent to 50 cents and would be distributed to business through normal banking channels from the RBZ.

Mangudya, although without confirming it, might have looked at options of importing the US coins before settling for the special coins which are being minted outside Zimbabwe.

From discussions with finance experts, to import US coins, Zimbabwe needed 16 plane loads and obviously at a very high cost.

However, the decision to bring coins was long overdue.

Retailers struggled with pricing and consumers felt very “short changed” as the absence of coins presented real problems for everyone concerned.

Zimbabweans should embrace these coins as they will surely bring a pricing stability.

Most of the prices in the shops were informed by change challenges and one way of avoiding headaches was to round off prices even if it meant consumers would feel the pinch.

Many Zimbabweans agree that our loaf of bread is not worth the $1 tag and with the new dispensation; there is need for a pricing re-think.

Prices of newspapers and beer, in future could benefit consumers.

Instead of being suspicious of the introduction of coins, we should see benefits from this move and there are many.

Perhaps this is one way of reminding us of the need to have a parsimonious attitude towards money and respect its value!

Comments (7)

Well done Mr. Governor.

African Cristiano - 3 September 2014

Guthrie and Fungi campaigning for the special coins. u say it wuld require 16 planes to bring in US coins and a move which wuld be very expensive. how many planes wuld it require to bring in the special coins being minted outside. Its imprudent to make special coins for exchange with the US notes when the US coins are already in existence. This move is tantamount to reintroducing the Zim dollar. You shall smell the coffee when u wake up to find only special coins in circulation and no greenback.

ndozvo - 4 September 2014

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