As the shortage of cash in Zimbabwe’s financial institutions continues, there is a mounting call for the adoption of the South African rand as a major currency in the country instead of the Ameican dollar, which is now scarce in commercial banks.
During his time as finance minister, Tendai Biti proposed that Zimbabwe should join the Rand Union but this was not adopted. Members of the union, also known as the Common Monetary Area, are South Africa, Swaziland, Lesotho and Namibia. The other countries also use their own currency even though the rand is the legal tender.
The rand is one of the multi currencies that are legal tender in Zimbabwe but the U.S dollar holds prominence though due its reputation for stability and usefulness in international transactions.
Bankers, economists, business groups and politicians are urging Zimbabwe to join the union but the government is insisting that it will not adopt the rand but is optimistic that the proposed bond notes scheduled to hit the streets in October will solve the cash shortages.
Some economists say adopting the rand will also be an advantage to Zimbabwe, which one of South Africa's biggest trade partners.
Economist Bulisani Ncube said the rand is the only solution in easing the cash shortages.
“That is the best route that this country can take even the circumstance that it finds itself and also if the intention is to grow the economy. The use of the U.S dollar after the demise of the Zimbabwe dollar managed to stabilize the economy but it cannot grow it because of the over-value of the US dollar in Zimbabwe,” he said.
He said if goods and services produced in Zimbabwe are based on the rand they would be competitive on the market compared to basing them on the U.S dollar.
