JOHANNESBURG — Billionaire telecoms tycoon Strive Masiyiwa
says Zimbabwe could achieve price stability if all goods were priced in the
South African rand, and the country could do this “overnight”.
Masiyiwa, whose Econet is one of the biggest companies in
Zimbabwe, reacted after the price of bread almost doubled to real time gross
settlement systems (RTGS) ZWL$3,50 from ZWL$2 this week.
Shops have been adjusting their prices upwards in response
to the continuing decline of the country’s RTGS currency to the United States
dollar, and the government has threatened price controls.
But Masiyiwa says Zimbabwe would do well to abandon the
United States dollar as the currency of settlement for rand imports which
account for 80% of goods sold in Zimbabwe.
President Emmerson Mnangagwa’s government does not need to
join the Rand Monetary Union to make the switch, Masiyiwa insists.
“Let me put the proverbial cat among the pigeons,” Masiyiwa
said, writing on Facebook.
“A loaf of bread in South Africa costs R9,50. It costs R30
in Zimbabwe. 3x!!! Eighty percent of imported goods in Zimbabwe come from South
Africa. It’s not uncommon to find those same goods costing anything above three
times the cost.
“The people who pay for a lot of goods are Zimbabweans
living in South Africa, through their remittances. The cost structure — labour
and goods — in Zimbabwe is distorted by the arbitrage of the United States
dollar as a currency of settlement for rand imports.”
Masiyiwa said if every business in Zimbabwe quoted their
customers for goods and services in the SA rand, “it would go some way to
eliminating the dollar arbitrage”.
“This is not the same thing as joining a rand monetary
area, or customs union, which is a much more complex process. This one can be
done overnight, and even voluntarily.”
Masiyiwa, who lives between South Africa and the United
Kingdom, says over a million Zimbabweans living in South Africa can demand
price parity in the rand. He predicts the switch to the rand as the main
currency of trade would “improve the quality of life for our families and also
improve general liquidity”.
But the tycoon also accepts that the currency switch “is
not what you have to do to fix Zimbabwe’s economic woes,” adding: “That is a
whole different story.”
The spiralling prices of goods, which are not matched by
salary increases, have heightened resentment against Mnangagwa’s government as
economists warn the country has entered hyperinflation.
Bloomberg
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