GOVERNMENT has been urged to de-dollarise only bank balances built after October 1 when bank accounts were separated into US dollar and real time gross settlement (RTGS) accounts, to protect people’s savings.
BY MTHANDAZO NYONI
Speaking during the Zimbabwe National Chamber of Commerce Matabeleland Chapter policy review in Bulawayo on Tuesday, economic consultant Nqobizitha Dube said bank balances should be ring-fenced the same way the central bank did to foreign currency accounts.
The Reserve Bank of Zimbabwe on October 1 created separate accounts for foreign currency and for RTGS/bond notes through a ring-fencing approach meant to ease foreign currency demand and protect foreign currency earners.
“Most of the people who are employed by you receive their salaries in RTGS. So if we were to debase the RTGS, as the minister has already said, it means the employed are the losers. The minister said ‘the market is talking, I have nothing to do about it’, yet the market has already reduced the value of the people’s income by almost 300%,” Dube said.
“So, if the minister is not going to care about people’s pensions, people’s medical savings and so on, then who will?’ he asked.
Dube said it was essential for the business community to start demanding measures that would protect people’s savings to avoid what happened in 2008 when people lost all their savings to hyperinflation.
“So, I think it is critical to start considering freezing RTGS balances at a particular date, to say the balances that existed before October 1, we are going to pay them out as government at an agreed rate,” he said.
“It may not be 1:1 to the US dollar, but it can be agreed at 1:2 or 1:5 and then those that come afterwards could be debased, but we have to be sensitive, particularly to those people who started saving in US dollar in the past, in 2015, 2014 and so on,” he said.
Dube said once the RTGS has been frozen, government could be realistic and admit that RTGS is not working.
“It is not at 1:1 to the US dollar; let the market debase it and destroy it in whatever way that comes. If it has been destroyed, it means that those who earn in RTGS would not be able to purchase, will not be able to conduct business,” he said.
“So what, therefore, should be the next stop gap measure? I prescribe that since our largest trading partner is South Africa, most imports, most raw materials, most things that we need in business are obtained from South Africa, we should start negotiations in the region and with South Africa to facilitate a liquidity package,” Dube said.
He said the currency reform option would allow government to cover a majority of its costs.
“So if we can pay civil service wages for a period that is going to allow for stabilisation, say six months, is it possible to start discussing an option like this one, which will create a multiplier effect in the economy?” he said.
“Because it means if the money is going to be paid, we are now able to transact and grow our economy with that, whatever package would have been given or negotiated. If that were possible, then we can now unpack the bond, the RTGS from the US dollar. We are no longer interested in being 1:1 or whatever.”
He said government and industry would now be able to conduct their business in a softer currency that allows for growth, exports and businesses to be generated, which will, in this case, be the rand.
“We do not need permission for this because we are already allowed to do it. There is a multi-currency approach that is already there, but the problems that make it difficult to do (use the rand) is that people earn in RTGS,” he said.