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Zimbabwean Business Face Uncertainty

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HARARE – Zimbabwe business owners are unhappy about their future while the government remains committed to the broad use of local currency for domestic transactions.

The Statutory Instrument states that with effect from 24 June 2019, the British pound, United States dollar, South African rand, Botswana pula and any other foreign currency shall no longer be legal tender alongside the Zimbabwean dollar in any transaction in Zimbabwe.

The Zimbabwean dollar is only used within the borders of the country and business owners point out that they cannot use the local currency to import goods.

Added to their pain, the country’s annual inflation rate doubled from May to June, to 175%, with economists indicating that severe depreciation of Zimbabwe’s struggling currency will send prices spiralling.

Grocery retail owner Nomsa Matemanebwe told Scrolla.Africa she doesn’t agree with the government’s monetary policies and their coercion of business people to accept local currency.

“Their policies are aimed at increasing the thirst for local currency but it’s all being done at the expense of business owners. We prefer US dollars because the local currency devalues every day,” she said.

Solar business owner Henry Chasara said they can’t accept the local currency as they import their goods and access to forex on the informal market is expensive.

“The local currency is forever depreciating and by the time you want to buy forex, the price would have changed three times in a day,” he said.

Economist Brian Masuku said that according to ZimStat nearly 70% of domestic transactions are done in foreign currencies and many business owners now prefer to take the US dollar because of its strength.

“The Zimbabwe government’s efforts to institute several measures with the aim to increase demand for the local currency and raise its value, as well as stop demand for the US dollar, is a clear indication that the local currency is not good for the economy. They are actually forcing the market to take a tough road,” he said.