The Confederation of Zimbabwe Industries, the country’s largest business lobby group, said the government should adopt the South African rand as its “reference currency” instead of the United States dollar.
While the country’s unique “multi-currency system” should be maintained, all financial reporting should be done in rand, the confederation said in a statement handed to journalists in the capital, Harare, on November 4 before national budget negotiations this week.
South Africa is Zimbabwe’s neighbour and biggest trading partner.
“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.
Zimbabwe abandoned its own currency in 2009 to end hyperinflation and uses mainly dollars, with rands, euros, pounds and several other currencies also accepted as legal tender.
A shortage of foreign exchange after a collapse in exports has caused a liquidity crisis that has forced the government to delay worker payments.
Last week, President Robert Mugabe authorised the introduction of the $200 million-backed bond notes to ease a shortage of the US currency.
“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 externalisation of dollars, this will grow.”
Finance minister Patrick Chinamasa will present the country’s 2017 National Budget in late November or early December, the ministry’s secretary, Willard Manungo, said last week.
In an interview with Zimbabwe’s State media, South African Trade and Industry minister Rob Davies said his country was unlikely to lobby for Zimbabwe to join a rand monetary union.
“It’s not anything that we, particularly as the government of South Africa, are pushing for,” Davies said.
“It’s a sovereign decision for the government of Zimbabwe.”