The Minister of Industry and Commerce, Professor Welshman Ncube, said the Zimbabwe dollar would not be re-introduced any time soon, even after the lapse of the initial 12 months period, which had been proposed by the Government early this year.
Prof Ncube made this revelation while responding to concerns raised by the business community at a meeting in Mutare on Wednesday on the need to have a basic currency to wade off the current liquidity problems in the country.
The meeting was organised by the Zimbabwe National Chamber of Commerce (ZNCC) in an effort to bring the Government ministers and the business community together.Zimbabwe’s national currency had been suspended for at least a year following the legalisation of foreign currencies, as there was nothing to support the value of the Zimbabwean dollar.
Since the move, consumer prices have fallen for three months in a row.The Central Statistical Office said the consumer prices were currently falling by three percent month-on-month. They were using figures collated in March. In February, prices fell by 3,1 percent according to the CSO.The inclusive Government has prioritised rebuilding the devastated Zimbabwe economy since taking office in February.
Said Prof Ncube: "We really need to address the issue of liquidity, there is nowhere in the world where there is a cash economy like our current situation in the 21st century. If our manufacturing companies start to produce at 100 percent, we won’t have the market to consume the products. We cannot make any progress. Some still have the nostalgia that the Zimbabwe dollar will come back soon, but the reality is that, it won’t come back any time soon. It’s not possible, even in 12 months.
"This nostalgia about sovereignty, this nostalgia about our own currency-let us face the reality, it won’t come back. The possible solution is to join the Rand Area and have our allocation of the Rand. After getting the allocation, then we can introduce the Zimbabwe dollar and fix the exchange rate on one as to one," he said.
He said the Ministry of Finance was working with banks with external parentage to capitalise the local banks.
"The Ministry of Finance is working with banks that have external parent banks to re-capitalise so that we can have sufficient funds," he said.
He said on the issue of tariffs, utility companies had been advised to go back to the drawing board.
"There is need to compare our tariffs with those charged by other SADC countries and come up with a mean average. We need to charge the mean average and nothing else. There is also need for great infrastructure capital investment," he said.
Also addressing the Press after the tour of Mutare Board and Paper Mills plantations and plant in Mutare, Prof Ncube said the Government was working on modalities to bail out stressed companies. He said there was need to inject capital through the securing of credit lines.Mr Richard Zirobwa -the Art Corporation Group chief executive, which owns the MBPM, had told the entourage, which also included the Minister of Media, Information and Publicity, Cde Webster Shamu, the Minister of Regional Integration and International Co-operation, Mrs Priscilla Misihairabwi-Mushonga and the Zimpapers chief executive, Mr Justin Mutasa, that the manufacturing concern needed a credit line of US$1, 8 million to resuscitate operations, which ceased in October last year due to prohibitive production costs.
"Under the STERP programme, we also target the paper and packaging industry, you are on our priority. We have toured several companies operating at five, 10 and 15 percent, but you are at zero percent production. We have to open lines of credit from regional and national partners from which you shall benefit. We want to revive production so that we attain 60 percent production by the end of year," said Prof Ncube.
Mrs Misihairabwi-Mushonga added that the Government was engaging donors eager to provide humanitarian assistance, especially in the education sector, to source learning materials locally, thereby boosting the local industry.
"We have to dissuade them from importing material that can be produced locally," said Mrs Misihairabwi-Mushonga.
Mr Zirobwa explained that his organisation had the capacity to meet local educational, newspaper industry and export market needs when on full throttle.
"Newsprint is being imported because as the main producer we have been offline since last year. When we are back in operation, we will be able to produce high quality products at a competitive price. All we need is enough working capital to be injected in the project," said Mr Zirobwa, whose organisation can produce 18 000 tonnes of newsprint per year.
"We can supply the local media, schools, stationary needs. We can resuscitate the education sector by making abundant paper available for national scholastic needs and downstream industries," he added.
Mr Mutasa said though the closure of MBPM had a negative impact on the operation of the country’s largest publishing house, it also taught them a lesson of not depending on one supplier.
"We were not wise then, but we are now clever. We have alternative suppliers who can supply us with a high quality product, which is competitively priced. We consume 75 percent of newsprint in Zimbabwe and the dollarisation of the economy will certainly give use the leverage to bargain because there is no way we will buy locally at a price more expensive than importing," said Mr Mutasa.
New Ziana CEO, Mr Munyaradzi Matanyire, urged the Government to bail out MBPM because since its closure, his organisation was forced to deal with middlemen who were charging exorbitant prices.
"Its closure has been detrimental to our operations because they are the sole manufacturer we have been dealing with. This forced us to scale down on our print run so that we remain afloat," he said.