Finance Minister says Zimbabwe is heading for monocurrency

Zimbabwe’s finance minister Mthuli Ncube. Photo: Frank Chikowore
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CHAOS in the market including refusal by banks to lend money in ZWL and US$ prompted the enactment of Statutory Instrument 218 of 2023, which effectively extended the use of the multiple currency system to December 2030.

Presenting at this year’s pre-budget seminar, held under the theme ‘Consolidating Economic Transformation’, in Mount Hampden, Minister for Economic and Investment Promotion, Mthuli Ncube said SI 218 of 2023 released pressure from the market.

“You saw the SI that we issued a few days ago, where we said because of that, we wanted an orderly situation in the market rather than disorder,” said Ncube.

“Disorder was beginning to emerge. What we saw in the banking sector. Banks were now refusing to lend money at all, some of them in USD, so that had become chaotic.

“So we thought that let’s release some pressure from the market to restore order,” added Ncube.

The minister reiterated that Zimbabwe’s plans for a mono currency were still in motion.

“We are headed for mono currency, let’s be clear about that, but we want order. So that extension 2030 was to create order and calm in the market.”

Ncube warned of keeping a tight leash on fiscal and monetary policy.

“Also we expect that we will continue with tight fiscal and tight monetary policy.”

Through S.I. 218 of 2023 Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations gazetted on October 27, 2023, the Government said it has amended the Exchange Control Act (Chapter 22:05) in Section 11 (Civil Penalty Orders) by the repeal of subsection (2a) and substitution of (2a).

“His Excellency, the President, in terms of Section 2 of the Presidential Powers (Temporary Measures) Act (Chapter 10:20), hereby makes the regulations (that) the Exchange Control Act (Chapter22:05) is amended in section 11 (Civil penalty orders) by the repeal of subsection (2a) and substitution of  (2a).

“The provisions of the Schedule, in so far as they expressly or implied permit the settlement of any transaction or the payment for goods and services in foreign currency, shall,  notwithstanding Statutory Instrument 142 of 2019, be valid until the 31st December, 20230,” reads part of the SI.