Zimbabwe will maintain the multi-currency system and continue with cash budgeting until exports pick up, Finance minister Tendai Biti said yesterday.
Addressing at least 400 delegates attending the country’s second investment gathering organised by government and Euromoney Conferences, Biti said the country can only revert to the Zimbabwean dollar when exports improve.
“The Zimbabwean dollar is old fashioned and the market for it is for the people in Zimbabwe,” he said. “Let’s get into a market of 100 million people. We are looking at a regional currency, which will be pushed through the Sadc market as the local demand is weak.
“We are going to continue with cash budgeting. It’s a nightmare because you wait for the money before it is disbursed.”
The country has been on cash budgeting since 2009 when the multi-currency was introduced. Zanu PF at its annual conference last December passed a resolution to re-introduce the Zimbabwe dollar, which was withdrawn from circulation following a record breaking hyper inflation period.
“We are over-taxing our people and relying so much on the Budget,” he said.
“I want you to think of what we have achieved in the past three years without meaningful direct Budget support.
“I want you to think of Zimbabwe as a total normal society, what we can achieve when we can have a $1 billion, $2 billion, $3 billion of overseas development assistance, $3 billion foreign direct investment, I would submit that we would achieve wonders.”
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He said the other challenge the country was facing was the debt overhang, which stood at $9,1 billion. Zimbabwe owes the African Development Bank $550 million, World Bank $1,5 billion and the Paris Club $3,3 billion.
Biti said a new-born baby in Zimbabwe would be saddled with at least a $50 000 debt that he or she was not aware how it came to be. Speaking at the same event, Vice President John Nkomo said investment promotion would broaden the transformation of the economy and consolidate macroeconomic stability.
“In the same vein, the government continues to work tirelessly to improve the business environment in Zimbabwe,” he said.
“We have also put in place adequate measures to protect investors’ rights and property.”
Economic Planning and Investment Promotion minister Tapiwa Mashakada said the conference also sought to attract local investors who had persevered during trying times.
He said Zimbabwe had not registered any disinvestment and its economic growth rates were comparable to those of India, Brazil and China. “We are trying to shake off the pariah state image,” he said.
“We are a growing economy and our macroeconomic fundamentals have stabilised.” The two-day conference ends today.
