The Economists Roundtable have warned against pegging prices of goods and services in United States dollars. The warning comes after the Reserve Bank of Zimbabwe introduced Statutory Instrument (SI) 142 of 2019 which bans the use of all foreign currencies for domestic transactions.
Speaking to journalists, former University of Zimbabwe economics lecturer Professor Ashok Chakravarti said that pegging prices against the US$ value was no longer necessary. He said:
Ever since we dollarised, everybody has been benchmarking against the US dollars.
We are not the United States of America, we are Zimbabwe. We need to start thinking in terms of our local currency, our costs are local costs; we pay our workers in local money, all our costs of production are in local money.
We need to start thinking in terms of costing, pricing, payments in local currency . . . we must start moving away from benchmarking against the US dollar to using normal prices as everybody does in Zambia.
People don’t think in US dollars in Zambia or in Malawi or in South Africa, they think in local currency and they price everything in local currency. So it’s an issue of the mindset and psychology, it will take some time.
The reintroduction of the Zimbabwe dollar brings uncertainty and fear amongst Zimbabweans who think the currency will quickly lose value as the original Zimbabwe dollar did in 2008.
More: The Chronicle