Zimbabwe's Finance Minister Says That The Country Cannot Afford To Adopt The Rand

As the economic crisis is biting Zimbabwe and hitting hard on the citizens, the country's finance minister, Mthuli Ncube said that Zimbabwe cannot afford to adopt the Rand as of now. 

Before getting into office as the finance minister, Mthuli Ncube had always advocated for the adoption of South Africa's rand as a method to alleviate the economic problems that affect Zimbabwe. He said that Zimbabwe could not afford to use the rand since it does not have the adequate resources to that effect.

Speaking to youths at a town-hall meeting in the country's capital, Harare, Ncube said that he realized the country needs US dollars to procure the rand, and as of now the country is critically short on US dollars.

"I also hear about adopting the rand, I even argued for it a few years ago and there was a reason.

"But you know what, if you are going to argue for the adoption of the rand, first of all you have to acquire the rand and we need US dollars to purchase the rand," he said, adding that this did not sound like a useful thing to do."

Ncube mentioned the issue that in the long term, Zimbabwe would ultimately need to have its own currency. Due to the hyperinflation period that marked Zimbabwe's economic situation especially in 2008, the local currency, the Zimbabwean dollar, lost value and in its place came the multi-currency system, with the United States dollars being the chief currency of this system.

Now, the country is short on the US dollars and the surrogate currency called the bond notes have not eased anything. The situation has actually got worse, with a black market emerging.

Zimbabwe is faced with an ever-growing import bill and as such the meagre export earnings have not been enough to meet the country's requirements.

The agonizingly scarce US dollars, which are needed to import raw materials and other critical imports such as fuel, are trading at a 300% premium to the local bond notes.

Header image credit: Bulawayo 24