Too late to adopt rand: Biti

HARARE - Former Finance minister Tendai Biti is having a laugh but laced with a tinge of disappointment.

In 2010, during the inclusive government era, Biti suggested Zimbabwe join the Rand Monetary Union (RMU) as a way of adopting the South Africa Rand instead of using a basket of multiple currencies, including the US dollar.

The US dollar became the dominant currency on the Zimbabwean market but its elusiveness has nearly brought President Robert Mugabe’s government to its knees, prompting it to use unpopular means such as introducing bond notes, in a desperate attempt to arrest the cash crisis.

Biti this week told the Daily News on Sunday that it is too late to join the RMU or adopting the South African Rand.
“There are some who are now calling that we should join the Rand Monetary Union.

“In 2010, I moved that Zimbabwe should join the Rand Monetary Union and I was heavily opposed, ironically, by the Bankers Association of Zimbabwe (Baz) among other groups but now I think it’s too late,” Biti told the Daily News on Sunday, exclusively.

“Now it’s no longer a solution because of the volatility of the South African Rand and also the disequilibrium of our own economy.  

“The current cash squeeze which has seen long queues forming at local banks on the back of pronouncements of introducing the bond notes, has led to suggestions that Mugabe’s administration must adopt the Rand as its major currency.

Baz, a professional and lobby group representing local bankers, has also waded into the Rand use debate.

Last week, its chairperson Charity Jinya told Parliament that government should explore the use of the Rand.

Jinya heads MBCA Bank, a subsidiary of Nedbak South Africa.
But Biti said Zimbabwe’s problems are too many to be exported into the RMU.

“The members of the RMU will not accept us because our economy has deteriorated so much” it would be like “the importation of Zimbabwe’s structural problems into the RMU.  

“And so they won’t accept unless we attend to certain structural problems.

“The underlying structure of the Zimbabwe economy is wrong, so whatever currency you use and change, it will be delegitimised by the structure of this economy and that’s why you need reform.

“It’s like a crook with a scar on his face it doesn’t matter what make-up you use, the scar remains the same.

“So deal with the fundamental problem of that structure. That is a problem we have it’s no longer a currency issue but a structural issue.

“So let’s reduce the cost structure and make it more competitive. So what needs devaluation is not the US dollar; what needs devaluation is the cost structure of Zimbabwe which is fundamentally skewed.” 

Biti’s successor Patrick Chinamasa has ruled out adopting the Rand while Mugabe has put the speculation on whether the bond notes are coming or not to bed by declaring there will be in circulation in October.

Most Zimbabweans, victims of Mugabe’s toxic and disastrous policies, have received with trepidation the announcement of bond notes introduction.

Although central bank governor John Mangudya has ruled out the immediate return of the Zimbabwe dollar, insisting conditions are not yet ripe for its re-introduction, there is palpable fear that Mugabe’s government will take back the country to the days of hyperinflation in 2008.

Millions of Zimbabweans sank into poverty while pensioners’ savings were wiped off as they were left to contend with the worthless local currency.

Comments (6)

Zimbabwe's problems are not to do with the shortage of the Rand. Zimbabwe needs to stamp out corruption, promote conditions conducive for foreign direct investment, ministers needs to be evealuated because they are sleeping on duty, there is need to monitor government expenditure, revamp agriculture, revamp the local manufacturing industry, increase exports and reduce unnecessary imports, promote consumption of locally manufactured goods, support SMEs, empower women and youth with meaningful income generating projects to alleviate poverty related to unemployment, stop externalisation of cash mainly by CHINESE. Train our youth into agents of development , peace and unifying factor, not into terror groups mean to instil fear into political opponents, respect and love one another as Zimbabweans.

Viona Ngwena - 13 June 2016

Biti is correct! Shortage of currency is what it is. We are not making money but losing money by importing food which we should grow. Zanu PF took all agricultural land and they are producing nothing but importing food instead of exporting. Zanu PF took all the diamond fields and they deposited all the sales proceeds in Hong Kong; Dubai; Singapore; Capetown etc. What do you expect? Cash eventually runs out. Nyika yedu irova risinga shandi. Zanu PF is just a mafia mob whose god father is RG Mugabe. What perplexes me is not so much of RG MUgabe himself but the people who surround him. What it means is that we are bankrupt of selfless leadership who are accountable. For all the literacy and education we have, we are a poor lot. That makes Rhodesia a better environment than Zimbabwe. The average life expectancy has dropped by 10 years. What a shame. We can not heap all this on RG Mugabe. He should be kicked out! Is he god?

Mbareboy - 13 June 2016

Sir, Tendai Biti, yes economically being sound you're very correct as our situation is way even beyond control. But Sir Biti, you have hurt our hopes, looking up at you as the solution to our problems, you gave us a false hope, left us in the dark. As such you left us with so many answered questions, why why Biti, it was going to make believe, but our hopes have faded away. I have used this platform to express my feelings. Mr Biti my point is, if only if, you had been united with Mr Tsvangirai, where do you think Zimbabwe would be right now? We thank you for the GNU, but why why Sir Biti? Hatisisina kana hope isu, kutisiya tichi tambudzika kudai here akomana.

Makatisiya tiri pakutambudzika Sir Biti - 13 June 2016

Zviri kutaurwa naVaBiti apa ndezvekudai;Kana loaf rechingwa richiita $1.00 muZimbabwe, it means u currently need about R15.00 to buy the loaf. ASI, in SA, the loaf costs R10.00. this means that the same loaf costs 50% more to but in Zim than in SA.If Zim joins the monetary union as it is, zvichaitika ndezvekuti vanhu vachatora maRands avo, vomanya nawo paNdazo kunotenga chingwa coz it will be cheaper there. This a simple example of the structure that needs to be fixed before we join the Rand Monetary Union. Zvichanetsa kuti tigadzire this structure coz kuti tibike that same loaf it costs us more than SA coz tirimbwa, takapedza kutuka vanhu vose vanogona kutikweretesa mari nerate irinani. Ikozvino tave kuona kuti hama dzedu maChina Havana basa nesu, vakatibira R15billion pluz varikutitorera vakadzi vedu. Hapana chembwa!

Tatenda - 13 June 2016

I agree with Tatenda's analogy of price mis-alignment as one thing that needs to be fixed before we join a monetary union. Also concerning is the sense of entitlement among Zimbo - you cant just walk into a monetary union (or any other union) - we should also think of whether we are wanted in there, what can we offer the union? if anything at all... This economy just needs a holistic policy rethink - or Chiyangwa's approach to ZIFA debts - lets call the country Ibwe and liquidate Zimbabwe :)

Ziglar - 14 June 2016

the only solution is regime change, believe it or not...

dennis moto - 14 June 2016

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