Biti wants rand to replace US dollar

RENEWAL Team interim secretary-general and former Finance minister Tendai Biti yesterday called on the government to disband the use of the US dollar (US$) as the official base currency and officially adopt the softer South African rand (SAR) to stimulate economic activity.

PAIDAMOYO MUZULU

Biti made the remarks while giving his party’s state of the economy address where he said that the country had to take decisive action to stem the current economic meltdown.

“We agree the issue of the US$ needs revisiting, but that does not mean the return of the Zimbabwe dollar. We propose US$ should be devalued by bringing in the rand as the official currency and joining the Rand Monetary Union,” Biti said.

His remarks came shortly after Finance minister Patrick Chinamasa admitted that dollarisation had caused distortion in the economy.
“Let’s find some consensus on the economy and differ only on the operational issues,” Biti said.

He said the Renewal Team was proposing a “third way” of dealing with Zimbabwe’s economic problems through a 16-point plan.

“Among other things the 16-point plan includes convening of an all-stakeholders dialogue on the economy, immediate leveraging of Zimbabwe’s resources in the mining sector and addressing Zimbabwe’s debt question and the execution of a home-grown brewed debt programme, ZAADS,” Biti said.

He also proposed that the government should unconditionally re-engage the international community, dialogue with multilateral financial institutions like the African Development Bank, Africa Import Export Bank, PTA Bank and the Development Bank of Southern Africa and repeal the Indigenisation and Empowerment Act to unlock cash inflows.

Biti said these would allow the issue of a $2 billion international bond that will be directed as an immediate stimulus for Zimbabwe.

He said in place of the Indigenisation Act, the government should articulate “an alternative broad-based empowerment and upliftment model that is transparent, fair and just as envisaged in Article 14 of the Zimbabwe Constitution”.

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52 Comments

  1. When he is not trading useless insults with Tsvangirai, Tendai Biti is giving out very practical solutions to solve our economic problems. It is so sad that MDC-T had to lose such an intelligent man but only in Economics, not Politics.

    1. That is why we are btwn a rock and a hard place,how can one suggest to adopt free falling rand as the main currency at a time when we are not producing enough to sustain us,We can only do away with usd when we have solved the main economic drive forces which are electricity,water,roads,rail,health facilities and real production on Farms.If we bring in rand like what the former sober guy is dreaming we risk becoming a province of South Africa,the prices of basic food items will end up being sold 400 percent more on this side of limpopo will for sure go back to 2008 zvekumhanya.basic items will disappear from shops into the streets,thank God you are not in Government.Lets not make suggestions that if effected only a few connected guys will benefit,lets pray for our beloved country for a solution to come this year that will set us on par with other nation

    2. @ Dr Know, the man is a lawyer, there is no way he can be the best macro-economist we have. His is the voice of Socrates in the wilderness, he failed in MDC because of exactly that persona, he believes he is the best mind, our own Ben Gurion.So if he takes part in a debate on Mathematical phenomena he will proffer meaningless and uninformed solutions in exquisite Tudor English and we will all applaud! Why national -dialogue when they covertly insist on Sanctions?
      Let him revive his legal practice in silence.

    3. ᴡʜᴀᴛ Aᴍʏ sᴀɪᴅ I ᴀᴍ ɪɴsᴘɪʀᴇᴅ ᴛʜᴀᴛ ᴘᴇᴏᴘʟᴇ ᴄᴀɴ ɢᴇᴛ ᴘᴀɪᴅ $7961 ɪɴ ᴏɴᴇ ᴍᴏɴᴛʜ ᴏɴ ᴛʜᴇ ᴄᴏᴍᴘᴜᴛᴇʀ . ɢᴏ ᴛᴏ ᴛʜᴇ ᴡᴇʙsɪᴛᴇ

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  2. iI’s common sense, this. As long as you don’t have your own currency (unfortunate as it is), one should simply adopt the currency of your largest trading partner. USD might be the biggest international currency, but for a relatively small economy like Zimbabwe’s it makes a lot more sense to just adopt the currency of a large neighbour. Certainly on the street level – at the very least, it would avoid all the impracticalities of using multiple currencies, dealing with different coins/banknotes, etc.

    1. ko kungonyarara kana tisinganyastoziva mafambiro ezvinhu zvinitinetsa Seiko? Is there anyone in Zimbabwe who is prohibited from trading in Rand today in Zimbabwe? NO. So what is this mBiti guy talking about? Why hop on a currency that is losing value faster than I can type? So we can put back the money burners in business?

  3. He is such a intelligent man. Unfortunately he left the Party carrying the mandate of the people of Zimbabwe.
    I agree with you Biti. Swaziland Lesotho and Namibia are using the Rand we can liase with the Reserve Bank of South Africa and come up with a clear agreement. Let’s swallow our pride.

    1. Hoko can’t you realise that we are using the rand already in zimbabwe. I think you need think before you send your opinions to the majority of zimbabwe. We are using the rand already.

  4. Johnsolo Dengate

    Biti has made a sensible suggestion to solve the financial mess Zimbabwe is facing. However, the greatest tragedy of Zimbabwe is that it hasn’t had ethical leaders. White papers and even green papers offering solutions are found everywhere but there is no willpower for implementation. The first port of call in resolving the Zimbabwean crisis should be address the leadership crisis. What Zimbabwe currently has is a set of armed robbers pretending to be genuine leaders. All their efforts are to ensure that they benefit immensely by looting as much resources as they can using state institutions. Money, farms, residential stands and shares of private companies have all been stolen by the ruling kleptocracy all in the name of correcting colonial injustices!

    1. Mariyawanda Mhiripiri

      Well said, Johnso. Couldn’t have put it better myself!

  5. Why did he not implement this when he was the Minister of Finance for 5 years?

    1. simply because the then cabinet resisted his moves. in fact he was opposed on all points because he was “mdc” if he had been “zanu-pf” then it wld have been different. case in point he introduced the “we-eat-what-we-gather” budget resisting salary increases & he was deemed anti-people. now chinamasa recently also said we will eat what we gather but not in biti’s words & zanu-pf said zilch, coz he chinamasa is theirs. gvt being “for-the-people” increased salaries of civil servants now civil servants have no guaranteed pay dates because gvt doesn’t have enough money in its coffers… i cld go on and on but i have better things to do, be a vendor b4 pasi’s zimra stikes.

    2. Kufandada you can say that again.

    3. Things wre still better then.
      Cant u see the economic situation has differed?????

  6. Danai Pazvagozha

    What a pity on Biti. I have always said that people who do not know economics must refrain from giving comments as they expose themselves to derision and ridicule. Biti talks of devaluing the US dollar by the rand, how can that happen under heaven. How can one currency devalue another currency? Devaluation is about reducing the exchange rate of one currency in terms of the other. So how can Zimbabwe devalue the US dollar or the rand when these currencies are not Zimbabwean currencies. Please Biti keep quiet, do not use terms that you do not know. Keep yourself to your legal terms where you have a degree.

    1. Mariyawanda Mhiripiri

      You are right that Biti has got mixed up in understanding the term devaluation. However, looking at the big picture he is right. We need to adopt the Rand for practical purposes. I support him on that but he must (as you insinuate) submit some of his speeches for editing by respective technical people!

      1. who is stopping you from using the rand NOW? Zimbabwe holds the record for the largest number of permissible tenders in the world of all time. Ada kushandisa Ripee, ndezvake. Ada kushandisa huawang ndezvake, ada kushandisa pula ndezvake. Ada rand ndezvake. All these currencies are always referenced to the US dollar. So what is this backstabbing mutundirafiriji dze UZ achimwene mBiti talking about?

        1. Mariyawanda Mhiripiri

          We are using the Rand rather informally right now. We do not have the blessings of the Reserve Bank of SA. When we go into the Rand Union there would be some control over our policies ensuring that our actions are harmonized into ensuring that activities in the market will not distort the value of the Rand. We can also get as much loose change as we deserve as the Reserve Bank of SA will avail the much needed coins through our banking system. Prices will then fall as they would now range from cents (SA) rather than from R1. In short, being part of the Rand Union will increase market distortions and extortionist prices will be under control. We are using other people’s money so let them influence its power. We are are no longer as sovereign as we think!

          1. Mariyawanda Mhiripiri

            Correction
            In short, being part of the Rand Union will decrease market distortions……..

  7. Biti for President, Tsvangirai for Secretary General ( Tsvangirai has shown to be a good Sec Gen during his days at ZCTU)

    1. It is a pity when people start to think that money has value outside of production and manufacturing. It’s an even greater tragedy when people think that having the opportunity to choose which ever currency they want to use is a bad thing. Its truly sad, when a government has monopoly over money they simply rob the citizens via inflation, we as Zimbabweans have the opportunity to circumvent is wrong and some are crying foul. The fact that it’s government crying should indicate that we are doing something right. Noone should have a monopoly over money, but we are so used to it that when freed we believe politicians, who use government monopoly over money to steal from us, that is a bad development! Remember the Zim dollar and how government, in cohorts with triple G, impoverished the majority of the nation. Money should be a storage of your labour and you should have the right to choose in with currency and form to store it in. The less the government can distort it the better. There’s nothing to be celebrated and praised concerning devaluation and inflation, it’s akin to praising robbery and thievery. Guess who is the victim, you, the one that produce the value that denominated as money. Why would you want to give a politician the right to change, at will, the number of notes that represent that value? That is what happens when you give government monopoly over what is money. The wider the selection of currencies the better; the better currency, that which people choose to store the value of their labour in, should be allowed to emerge naturally if at all. Lets keep and even enlarge the basket of currencies but government should never again be allowed to dictate which currency private citizens should hold.

  8. Can someone educate me on the benefits of adopting the South African Rand as the base currency. With the USD the prices have stabilised and we have actually witnessed some deflation or correction of price distortions as some would like to call it. If we adopt the Rand then we will be importing inflation from SA yet people’s disposable incomes are stagnant, falling or disappearing through retrenchments or non-payment of wages. Don’t forget that we used to have our own Zim dollar which was actually stronger than the Rand despite SA being our biggest trading partner. What is required at the moment is to see how we can stimulate local production at competitive prices so that we reduce our trade deficit, increase GDP, increase disposable incomes and improve inflows into government coffers. That stimulation can only be achieved through banks supporting local industries by giving loans at competitive rates, re-capitalisation so that we replace our antiquated machinery and produce at optimal costs, export from created excess capacity (by the way SA is exporting to Zambia, DRC,Malawi yet we are strategically located and have lower logistics costs). FDI is also key in this revival programme but needs supportive government policies. Indeginisation policy in its current state is the worst handicap to economic revival.

  9. Only production and curbing corruption will solve economic woes not bed hoping with different currencies(Chihure nemacurrency evamwe).

  10. am here to read macomments chete

  11. Kunyange Mbiti akataura zvinengei zvakanaka inindakato muona kuti mutengesi kare haana pfungwa yechakana munhuuyu.arikuda kutsvaga support nema votes manje wakairasa kuigochera pautsi soreeeeeeeeeeeeeeee

  12. Newsday rinondisekesa, the other time anenge achidzi “fired” sec general in qoutes mumwe musi anenge achinzi interim secretary general – ma 1

    1. Fatso zvanzi Renewal Team interim….. pabate ipapo zvakare. He remains fired kuMDC-T. Kwake na Drumz ndokwaave interim sec general waibata?

  13. that fake university economics lecturer who prepared that nonsense for you shd be fired cuz he/she is delivering poison to students, how can u go for a weaker currency when u are not even producing, do u kno that we will end up with imported inflation cuz everthing yu are importing, it was feasible if at least our plants were manufacturing at t least 60% capacity not what we have, at most 2%, ndanyara hangu and all those who are supporting this horrendous idea aah if u don’t kno economics plz don’t comment kkkkkk

  14. Here is solution to the crisis. !. Increase production in all sectors. 2. Banish corruption and nepotisim in all their forms. Anything outside this is a waste of time and efort!!

  15. Kwanzi “he gave these comments when he was addressing his party” which party? iam made to undestand they are yet to decide whether to form MDC-Orange or to fight Tsvangirai at the congress.So which party was he addressing? Anyway if we join the Rand then Chinamasa basa rapera, Ministry of finance wedu anenge ava kuSouth Africa.Nemhepo dzasumuka muSouth Africa iye zvino its a matter of time before the Rand start to crumble chaizvo.Some of us will keep our US dollars in case! Machange money anozara muroad manje manje.Zviedzei muone

  16. aerial production

    What he is toking is crap since the rand is also struggling, tinotoda ari mapounds kana maEuro chaiwo akasimba

  17. From today onwards l’ve lost all respect for Biti as an intelligent man. Wild govt policies, corruption & general lack of production in a country can never be rescued by any currency in the world

  18. While using the US$ has economic policy inflexibility, our biggest challenge is to work hard, and to do so with honesty and without corruption.Let us not sit in the offices and twiddle the exchange rate ; let us roll up our sleeves and produce on the ground and on shop floors.

  19. munangati kudzai

    pathetic

  20. The Future VC

    Forget about the rand. The SA economy is weakening and people with money there are clamoring for offshore investments. Now is not the time for the rand

  21. Hattaerncourt

    Replacing the US$ with the Rand is the most and first best option and it must take effect immediately

  22. Vamwe vanorwara venyerere. Uyu wake haumharwi nenhunzi kutaura bull! Wakadii kuzviita paGNU? Handiti waiona kuti hazvibhadhari? Tinyararire!!

  23. Andrew Kaseke

    Biti ndiwe wakaunza ma$$$$ acho nyarara

  24. Rand is a good considering, civil servants,local government and bussines are paid in Sadc strong currency. We know how much we are worth compared to regional countries. This will stop bad speculation and money will be easily attainable to the street man. South Africa is our strenght when they go down we fall together .

  25. Most of the goods that we are using in this country are being imported by shop owners frm SA. If we are to use the rand as Biti is agitating for will these goods be sold at a profit in Zimbabwe or the shop owners will simple be doing community service. How is the pricing going to be done for goods imported frm SA. Will there a new exchange rate for SA rand against the rand that will be used in Zim. I think Biti is lost. The real problem is not the US$ its Legitimacy crisis.

  26. It is really a shame when Zimbabweans just dismiss good thinking on the basis of political affiliation or on the grounds of unthoughtful suggestions.
    Biti on this is spot on, and no matter how you try to argue with him you are doing mental and reasoning damage to yourself. IT IS BEST FOR ZIMBABWE TO ADOPT THE RAND AND MAKE IT THE OFFICIAL CURRENCY and that way Zimbabwe will be on the recovery lane. Who doesn’t know that most business to Zimbabwe is done through SA?
    Some of the challenges that can stop us now include the unpredictable political atmosphere. The die hard Afrikaaners are courting President Zuma so that they have their own state in SA. That will obviously impact negatively on us in the future. But on this Biti is right. Someone asked (or mocked) why Biti did not do it when he was Minister of Finance; how could he have done that when he was just a figure minister? He had no control at home and abroad. Remember he was representing a party that was remotely controlled from White House and 10 Downing Street.

  27. how can we devalue US$ through disbanding it? if the government want south Africa to stop allowing it to use Rand let them try Biti’s idea . if implemented, what is going to happen is the rand will weaken drastically to US$, Business people will loose the current leverage they are getting from exchange profit as they convert powerful US$ to rand, the result is there will be no point importing from south Africa, which will translate to commodity shortages- a worst situation I am sure no one is willing to face.

  28. It is not the currency problem at all.As long as our production levels especially in industry,are low,no currency change will revamp our economy.We need to be more serious on our industries & agriculture.Of course we have to get along well with the international world at large.Remember we left the COMMONWEALTH&we are not in good books with EU,US foolishly accusing them of imposing illegal sanctions on us.Nothing will ever come from the EAST..Mr. BITI is fighting for political relevance which he lost ages ago.

  29. the multicurrency system is not a problem but the mgt of our economy, gvt must respect property rights to attract investors to revive our industry thus when everything will be stable.

    1. Reading over these comments i know why Zim does not progress. Too many educated fools! who can not sit and agree on a single point. Thats the loophole politicians take knowing that if he steals he has thousands of degreed fools to support him!!!! HAZVIPERE KUSVIKA AMEN.

  30. Biti my broda wooo! The only currency likely to devalue as a result of monopolising forex circulation in Zim is the same Rand. either Zuma has to print more notes to cater for us of which he wont, or we continue using it illegally as is it now then we throw away the meagre gift of pounds and US$ that was trickling in our country. Actually we will see a diversion of these robust currencies to RSA as diaspora would seek to convert their cash before it lands in Zim as Rands. that means a healthier circulation of Forex in RSA other than us. The equation doesnt add-up somewer. chimboitai zvemaOrange team yangu.

    1. Taura Sirivha. Biti akuda kurwisana ne Economy yeRsa manje. Hezvo yedu vakabatsirana kuizvamburira pasi. What he is literally saying by not saying it is lets suck Mzansi economy kunge zvikwekwe for us to kip surviving. Kwaaax. Ma trix avo anoshanda asi. Mumwe achiti chengetai vanhu vedu ikoko.. umwe oti tambirai vamwe vachauya nezvitupa semaVisa umwe otizve regai timbosakadza kamari kenyu. Kwasara kungoti ngatichinjane nyika dzacho asi presidents no. Kwaaaax.

  31. It is of no use to change currency when there is nothing happening in terms of boasting production and stop firms closure.Our problem is on gorvenance and not on economics.Once we solve the gorvenance issue everything else will fall into place.By the way Biti did they say they will call you back in gorvenment if you manage to destroy MDC?

  32. Economic environment was different..things were better 5 yrs ago.. dont tell me its still the same

  33. @Danai. By reading between the lines you can descern that the USD cannot be devalued, in the strictest sense of the word, but can be “devalued” by shifting allegiance to the rand. Thus dd for the dollar wl plummate causing the dollar to depreciate (th term wc u lyk) against the rand, wc z equivalant to devaluation. Anyway the major argument for adoption of th rand is to enable us to join the rand monetary union mayb to ease the liquidity challege. At the moment we are experiencing (greater) problems esp liquidity becoz we are not in full dollarisation bt simply multiple currency system. Hope u ar not offended, ndomaonero andaita.

  34. Everything we a importing from SA eg fuel electricity groceries etc so lets join the rand union

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