Where have gold coins been used and have they worked, Zimbabwe Senator asks?




Monica Mutsvangwa

Information Minister Monica Mutsvangwa who is also leader of government business in the Senate was yesterday taken to task to explain how the introduction of gold coins in the country would benefit ordinary Zimbabweans.

Senator Morgen Komichi even asked where on earth gold coins had been used and whether this had benefitted anyone.

“In Zimbabwe, how does the gold coin approach serve the challenges that are being faced by the civil servants, public servants and ordinary gogo, mbuya, grandma who is in Gokwe and Mberengwa? How do they benefit out of this approach, if ever it is an approach that is required to resolve the economic quagmire we are in Zimbabwe?” he asked.

Mutsvangwa said the gold coins were meant to provide a product for the store of value and to strengthen the local currency.

Following more questions about how ordinary Zimbabweans would benefit, Deputy President of the Senate Mike Nyambuya said the best approach was to invite Finance Minister to make a statement and he should do so at the next sitting.

“I want to make a statement that we need the Minister of Finance to come and address the Senate about these issues. This has been outstanding for a long time and I will make sure that we write to the Minister and the next sitting which we have, the Minister of Finance must come and explain these developments and issues which the Hon. Members are raising,” Nyambuya said.

“It is unfair to ask some of the details which you are asking the Minister of Information, not that you have not done well Minister, you have done extremely well.”

Full Q & A:

HON. SEN. KOMICHI: Thank you Mr. President. The Zimbabwean economy has caused so much pain among its citizens. The Zimbabwean dollar continues to lose value and ordinary people are really suffering. In order to control this situation, the Government introduced the gold coins. Many people do not understand how the gold coins work. Where on earth has this approach been used and has it benefitted anyone? In Zimbabwe, how does the gold coin approach serve the challenges that are being faced by the civil servants, public servants and ordinary gogo, mbuya, grandma who is in Gokwe and Mberengwa? How do they benefit out of this approach, if ever it is an approach that is required to resolve the economic quagmire we are in Zimbabwe? The question is directed to the Leader of the House.

HON. SEN. MUTSVANGWA: Thank you very much Mr. President. I want to thank Sen. Komichi for the question which shows that as a leader, he is concerned by the people’s lives and things which make this country a better country. I want to say, first of all, the fundamentals of the economy of this country are in the right place. The issue of gold coins which he has brought about is an issue which the Reserve Bank has come up with. It is a very clear plan to move the economy forward.

The introduction of gold coins is meant to provide a good product for a store of value and to strengthen our local currency and minimise the volatility of the parallel exchange rate. Once I speak about the volatility in the parallel exchange rate, it affects the grassroots, people all the way to the bottom, to any village, any ward and any cell. By introducing the gold coin, they are already dealing with that problem. I want him to understand that the introduction of the gold coins is really meant to minimise that volatility of the parallel market and also to strengthen the local currency.

The suspension of lending is again something which was done to give Government time to investigate and all the speculative lending activities. There has been a lot of dirty work which has been happening in the economy. There is no country in the world where the exchange rate is determined by a private company. In this country, the RBZ will say the exchange rate is so much and then there is another institution or company out there which gives another exchange rate. So, all what Government is doing is to make sure that we promote our local currency. We minimise that pain which is happening because of the volatility in exchange rates. Thank you.

HON. SEN. PHUGENI: Thank you Mr. President for the opportunity. Thank you Minister for the answer. You said the fundamentals of the economy are solid but you and I know that our people continue to languish in poverty. Our people continue to struggle to pay fees which is charged in foreign currency or at a parallel rate. Our children are dying because of malnutrition, reason being that we cannot afford to buy goods from the shops. Everything in this country has become difficult and impossible to achieve because of runaway inflation yet the Minister says fundamentals of the economy are solid.

The question therefore Minister is; what are the fundamentals of the economy that are solid? What is this solid economy which somehow does not help the ordinary person? Not only the ordinary person, our doctors are striking week in and week out, our nurses, our teachers, the parliamentarians are crying, everyone is crying yet the economy is said to be solid. What is this fundamental economy? Thank you Mr. President.

HON. SEN. MUTSVANGWA: Thank you Mr. President, I also want to thank Hon.  Kalpani Phugeni and want to say to this august House, this economy is on the roll and that is the truth about it. When you go outside I understand fully the suffering of our people, that is why I said all what the Government is doing is to make sure that there is stability in the country which is being attacked by the detractors of this country. When I talk about the fundamentals that are there, I think the Second Republic has created an environment where entrepreneurs have been doing extremely well in this country. Just to go outside there and I am not closed, I am a politician myself and know how people are suffering.

When you go outside there and look around what is happening in the country, the roads which are being done which had never been done for so many years, the bridges and dams which have been built, the Gwayi-Shangani Dam is going to increase water supply in Matebeland for example, things which have never been done for the last 42 years. We all know that by having the Gwayi-Shangani Dam, we will have reliable water supply for that region. Once there is that massive water body, projects will then be ignited to make sure that this country has rural industrialisation. That is happening and that is one of the dams but there are so many of them. I am talking about the investment which has been made, especially in electricity.

Look at Hwange Unit 7 and 8, the work which is being done there to make sure that there is electricity. There has been investment which is being done in Hwange and which we did not ask for a cent from Treasury. This is private investors coming to increase electricity which we know is an economic enabler which will make sure that the industries in this country can work. By 2025, in this country, the vision is clear that there will be enough electricity for our industries to open so that our people can be employed – [HON. MEMBERS: Inaudible interjections.] –

THE HON. DEPUTY PRESIDENT OF SENATE: Order, order! Can we have one Senate sitting? Can we give the Minister the opportunity to respond and then you can ask any other question which you want.

HON. SEN. MUTSVANGWA: Thank you very much Mr. President for the protection. I want to go ahead and respond to that issue. You are talking to the Government spokesperson and these are issues which we are always concerned about showing and telling the people about the programmes which are being done by Government. We have seen His Excellency the President continually criss-crossing the ten provinces of the country to make sure that industries value add and beneficiate. This is all being done to make sure that we industrialise this country. Boreholes are being drilled to make sure that people have clean water.

There has been COVID pandemic in this country, where many other countries are actually behind Zimbabwe in terms of what the Government of this country has done to save the lives of the people of this country. The suffering as you clearly said, is actually coming from the issue of volatility in the currency and this is precisely what the Government is dealing with and that is what I explained. I thank you.

HON. SEN. ENG. MUDZURI: The Hon. Minister has explained that the gold coin is addressing the volatility of the currency and ensures that there is a stable currency. Can she explain how the gold coin is going to address the volatility of the dollar and how it is going to be used by the old granny in Chiendambuya, Malipati and all over where they cannot even access the present Z$ which if you go to the bank, you can only withdraw Z$5 000 as cash which is equivalent to less than US$10. How does this link up with our local currency and the number of currencies that have been allowed to work?

HON. SEN. MUTSVANGWA: I want to thank Hon. Sen. Mudzuri but the question is actually connected to what I have already said that the issue of the introduction of gold coins is actually meant to provide a good product for store of wealth. What it means is, who is causing this volatility of currency? This is what is causing inflation and problems which our ordinary people all the way to the grassroots are suffering from. This is why the RBZ has come up with this so that he minimises that volatility. I hope that is clearly understood. As to the details, I think it will be in order for the Minister of Finance and Economic Development to come with a paper in this august House to talk to the details pertaining to the last point. I thank you.

THE HON. DEPUTY PRESIDENT OF SENATE: I want to make a statement that we need the Minister of Finance to come and address the Senate about these issues. This has been outstanding for a long time and I will make sure that we write to the Minister and the next sitting which we have, the Minister of Finance must come and explain these developments and issues which the Hon. Members are raising. It is unfair to ask some of the details which you are asking the Minister of Information, not that you have not done well Minister, you have done extremely well. – The Insider