HARARE – Zimbabwe’s President Emmerson Mnangagwa has said that the country will reintroduce a local currency in order to bring back economic stability.
Mnangagwa said that Zimbabwe will bring back a national currency as its legal tender since the country cannot develop using several foreign currencies.
Mnangagwa stated this when speaking at the ceremony where he was sworn into office for a second term.
BASKET OF CURRENCIES
Zimbabwe adopted a multi-currency regime in February 2009 to combat spiking inflation. It has been using a basket of different currencies as legal tender since 2009 when the country saw economic instability.
“In 2009 our currency collapsed and former President Mugabe appointed a committee of five people, which I chaired, to look into the currency issue. We agreed that for us to survive we had to create a basket of currencies and to allow our own currency to die.” Mnangagwa said, per The Chronicle.
The arrangement which allows the use of several foreign currencies is guaranteed until December 2025, under Statutory Instrument (SI) 118A of 2022.
During his recent swearing-in ceremony, Mnangagwa said that Zimbabwe will put into place measures that will entrench the use of a single currency.
This is because using a single national currency will help to bring sustainable growth and development to the independent country which was known as the “Breadbasket of Africa”.
Through the use of a sole currency, a government has control over its monetary policy. It is also better able to manage capital flows. Ultimately, this enables a state to protect its own interests.
Using a national currency enables a state to respond to the challenges it faces and to design policies that meet its specific needs.
Mnangagwa said that using multiple currencies is not in the country’s best interests as this does not enable sustainable growth.
“We must bite the bullet. Whether it gives us some suffering for a period, we shall proceed to have our own currency – not a situation where the economy has a regime of currencies in use. We want a single currency and we are going there.” Mnangagwa said.