Zimbabwe’s largest business lobby group, the Confederation of Zimbabwe Industries, is urging the Zimbabwean government to adopt South Africa’s currency – the Rand – as its major currency rather than the US dollars.
Due to the hyperinflation in Zimbabwe, the southern African country abandoned the Zimbabwean dollars – its official currency in 2009 – while taking up other currencies. The currencies adopted were the South African rands, euros, pounds, US dollars and others.
The confederation, however, did not call for the dismissal of the use of other currencies adopted in Zimbabwe, but rather suggested that financial transactions should be conducted in Rands. This was disclosed in a statement granted to journalists in Harare, Zimbabwe’s capital city.
“We suggest the Minister of Finance starts presenting his budget in rand instead of dollars,” the group said, citing proposals it will present to the Finance ministry.
South Africa is a neighboring country to Zimbabwe, the country with the biggest economy in the region and also top three in Africa at large.
Zimbabwe is currently going through a liquidity crisis. A crash in exports and shortage of foreign exchange has resulted in money shortages. This subsequently resulted in the adoption of bond notes, which will be circulated in Zimbabwe sometime this month. The bond notes are being considered fake in Zimbabwe, sparking fears of the hyperinflation days in Zimbabwe.
“With the acute liquidity crisis of cash dollars, the rand is becoming more attractive for business,” Alex Vines, head of the Africa Program at London-based Chatham House research group, said in an interview in Johannesburg on November 4.
“Business has already been asking for it and with the increased externalization of dollars, this will grow,” Bloomberg reported him as saying.