In Parliament on Wednesday, opposition lawmaker Chalton
Hwende (Citizens Coalition for Change) asked government to consider paying
farmers in United States dollars only to preserve value for retooling and
preparations for the next season.
“The RTGS will not enable these farmers to buy inputs for
the next cropping season,” Hwende said.
“Why is the government not considering paying them in
United States dollars for all their produce just like what is being done beyond
the borders? Right now, the government is paying farmers RTGS and expects them
to go to shops where prices are being inflated.”
Last month, government announced that farmers would be paid
at US$368 per metric tonne payable as US$200 in foreign currency plus US$168 in
Zimbabwe dollars at the interbank rate.
This means farmers will get nearly half of their earnings
in local currency at the official rate, which is less than half the value on
the verdant parallel market.
But Justice minister Ziyambi Ziyambi, who is also the
leader of government business in Parliament, said government was not prepared
to dump the Zimdollar.
“Honourable Hwende is in other words encouraging government
not to pay in RTGS (Real Time Gross Settlement), but US dollars. The truth is
that we cannot stop paying farmers in RTGS. We cannot, therefore, say we are no
longer paying in RTGS. We cannot dump the RTGS because it has lost value and we
adopt another currency. That is not possible. We have to promote our own
currency if we want to control our own economy,” he retorted.
“We can only put measures to control and stabilise the
inflation rate on the parallel market. If you look at all the countries around the
world, Zambia for example, has once done it, but eventually moved away from
that decision and opted for its own currency, the kwacha.”
However, Norton legislator Temba Mliswa (Independent) said
government should abandon the local currency experiment.
“Let us not lie to each other. Our local currency has no
value at all. Let us park it. We must not play politics with reality,” Mliswa
said.
“As ministers, they are paid in US dollars, that is what
they are using and that is what has value.”
Zimbabwe, which has suffered bouts of hyperinflation over
the past 15 years, is in the throes of another episode of hyperinflation, while
its currency is on a free-fall.
Critics blame the dire state of the economy on years of
government mismanagement and made worse by endemic corruption.
At 75%, inflation is a long way off the 500 billion percent
recorded by the International Monetary Fund at the height of hyperinflation in
December 2008, but remains among the highest in the world.
That hyperinflation episode forced the southern African
country to dump its currency, which had become worthless, and legislators feel
that the current economic crisis and the free-falling currency warrant similar
action.
When the Zimdollar was reintroduced in June 2019, it was
trading at 1:1 with the US dollar, but has since fallen to $1 407 on the
official auction market and $3 200 on the black market. Newsday
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