KWEKWE town clerk Emmanuel Musara believes the current liquidity crunch could be solved if government makes the official trading currency the Chinese yuan.
BY BLESSED MHLANGA
Speaking at a council finance meeting recently, Musara said if the government allowed the Chinese to open a bank in Zimbabwe, cash challenges would disappear, noting that the continued use of the United States dollar was straining the economy.
“The town clerk felt that the liquidity challenges the country was going through might be lessened if the Chinese are allowed to open a bank in the country as their currency is now among the four universally accepted currencies,” part of the minutes from the meeting read.
Musara felt that things were better in Zimbabwe when the rand was standing its ground against the US dollar and debtors were paying their bills.
“The country used to have high liquidity when the rand was the preferred currency of trade before the US dollar,” he said.
Kwekwe is facing serious cashflow problems and is struggling to pay its debts, especially with Zesa Holdings and Zimbabwe National Water Authority (Zinwa).
Zesa claims to be owed $10 million by the local authority, while the Zinwa debt is over $1 million.
The finance department said council was owed $28 265 702 by January, up by $367 747 from October last year.
Council now owes $19 358 328 to its service providers after borrowing an additional $250 697 in just three months, a situation Musara believes is being caused by use of the US dollar.
Zimasco, which has since applied to be placed under judicial management, is also one of council’s major debtors, owing $802 568, which they have proposed to pay through barter trade.
The chrome smelting company has so far supplied water treatment chemicals worth $192 000 to council as part of the bill settlement programme.