IN Parliament this week, legislators from both the ruling Zanu PF party and main opposition MDC took turns to seek clarity on the country’s currency from Justice minister Ziyambi Ziyambi. At the moment we, indeed — as the minister rightly put it — have a basket of currencies, which means we have a choice of what to use for trade. We have the US dollar, British pound, South African rand, Botswana pula, Chinese yuan and many others.
Among these currencies, there is our own unit, the Real Time Gross Settlement dollar (RTGS$), which itself is a basket made up of bond notes, bond coins, electronic transfers and local Treasury Bills. And in these two seemingly different currencies is the crux of the confusion that is vexing not only our Members of Parliament, but also the ordinary person on the street.
“Technically, according to SI133 of 2018, the RTGS$ and bond notes are different, but both are trading currencies in our laws and so, practically, they are the same,” was Ziyambi’s learned answer to MPs. That is confusing. So, technically, we have two local currencies — one virtual (RTGS$) and the other real (bond note). So why was the RTGS dollar introduced when we had bond notes in circulation? Why did government not simply say the new currency would be the bond note since it was already trading at 1:1 with the US dollar before the introduction of the RTGS dollar?
And because of this strange set-up we have in our monetary system, we still have a situation whereby the RTGS$ and the bond note have different rates on the parallel market, albeit on the formal market they are treated at par. While we may like it or not, the parallel market is still calling the shots and it brazenly exposes the paradox of our two currencies.
Linked to this were also questions of what happened to the US dollars that were deposited in banks before the introduction of the RTGS$?
Ziyambi has informed us that the US dollars were all converted to RTGS dollars; and herein lies the major reason why investors remain spooked by the country’s investment environment. Having seen other investors’ money being converted overnight into a currency that immediately lost value against the US dollar, any investor in their right senses would definitely think twice before bringing their money into Zimbabwe.
This situation scares the wits out of some us. Our government must get its act together and quickly act on this currency conundrum because without clarity on this matter, we may shout ourselves hoarse from rooftops calling for investors, but none will ever pay us a visit.