A SOUTH AFRICAN minister has called on Zimbabwean businesses to use the rand as a trading currency as it is now stabilising after the adoption of measures to prop up the economy.
BY TATIRA ZWINOIRA
As of yesterday morning, the rand was trading at R15, 65 to the $1 which has been stabilised around these weaker levels in the past few weeks amid a better response plan from the South African government dubbed the 6 I’s response plan focusing on industrialisation, infrastructure, investment, innovation, inclusion and integration.
Speaking to NewsDay on Monday on the sidelines of a welcome dinner, South African deputy minister in the department of Trade and Industry Mzwandile Masina said the current volatility of its economy would dissipate as its currency stabilises.
“The rand has stabilised and we can only encourage the Zimbabwean people to consider using the rand as a trading currency between the two countries and the challenges that are facing us now will dissipate, I have no doubt about that. We have no doubt that the currency will stabilise that is why our government has come up with the six I’s response plan that is industrialisation, infrastructure, investment, innovation, inclusion and integration as our strategy,” Masina said.
“If you look into our investment pipeline it has increased, investors day in and day out are launching big projects in South Africa so it is not correct that investors are shivering or that they are uncertain. We have been upfront about our challenges and have not hidden the fact that we have been hit by the global economic crisis and have a response plan.
“We are seeing a number of investments coming into our country and we will be going out to encourage other investors to come to our country and I have no doubt that we are on the right track as government.”
The South African rand is part of the multicurrency basket introduced in 2009 to stem hyperinflation.
However, the currency was last year rejected in the local market due to its continued depreciation against major currencies posing headaches to retailers on conversion rates.
The rand reached a high of R16 to the dollar which reduced confidence in the currency from the local sector.
He said it was in the South African government’s strategic nature that the growth and development in South Africa must be intrinsically linked to that of Zimbabwe.
South Africa is Zimbabwe’s biggest trading partner. In 2015, South Africa’s gross domestic product came in at $270,2 billion while merchandise exports were $68,83 billion.
Macro-Economic Planning and Investment Promotion minister Obert Mpofu said South Africa remained critical for the turnaround of the Zimbabwean economy through foreign direct investment which involved transport technology, employment, infrastructure development and small and medium enterprise equipment. He said this translated in economic growth and development.
“Zimbabwe also plays a critical role in South Africa’s economy through its highly literate resource base and strategic location which has the potential to act as a distribution hub and gateway to the market,” Mpofu said in a speech read by deputy minister of Industry and Commerce Chiratidzo Mabuwa.