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The Government has rejected calls by the opposition to pay farmers for their produce exclusively in United States dollars.
Speaking during a Question and Answer session on Wednesday, Kuwadzana East MP Chalton Hwende (CCC) asked the Government to consider paying farmers in USD to enable them to buy inputs for next season. <a href="https://www.newsday.co.zw/local-news/article/200011744/dump-the-failed-zimdollar-mps">Said Hwende</a>:
<blockquote>
The RTGS will not enable these farmers to buy inputs for the next cropping season.
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.
</blockquote>
In response, Justice, Parliamentary and Legal Affairs Minister Ziyambi Ziyambi, who is also the leader of Government business in Parliament, said the Government will not abandon the Zimbabwe dollar. He said:
<blockquote>
Honourable Hwende is in other words encouraging government not to pay in RTGS (Real Time Gross Settlement), but in 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.
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.
</blockquote>
Last month, the Government announced that grain farmers will be paid at US$368 per metric tonne.
US$200 will be in foreign currency and the remaining US$168 in Zimbabwe dollars at the interbank rate.
When the local currency 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 more than $3 000 on the black market.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Govt Rejects Legislators' Call To Pay Farmers Exclusively In US Dollars

The United States dollar has replaced the Zimbabwean dollar as the most-used currency in the southern African nation for a second time.
According to a <a href="https://www.bnnbloomberg.ca/us-dollars-dethrone-zimbabwe-s-currency-for-second-time-1.1905097">Bloomberg</a> report, US dollars were utilised for 77% of transactions this year, surpassing the proportion that was conducted in the local currency for the first time since it was reissued in June 2019.
Zimbabwe abandoned its own currency in 2009 and replaced it with the US dollar and other foreign currencies after hyperinflation had rendered it worthless.
The local currency was reintroduced in 2019 in an attempt to revive the stagnating economy.
The Zimbabwean dollar has depreciated 91% against the US dollar in the last two years to trade at 944 at the official rate and about 1 600 on the parallel market.
Local businesses now charge in greenbacks for everything from food, and fuel to medicines.
Cement maker PPC Ltd.’s local unit said in its latest financial statement, that 79% of sales were in US dollars.
Speaking to Bloomberg, Gift Mugano, an economics professor at the Durban University of Technology, said:
<blockquote>
Passports are paid for in dollars, some taxes in foreign currency, fuel is in dollars and you can also pay toll gates in dollars.
</blockquote>
Prosper Chitambara, a Harare-based economist, said “the economy for all intents and purposes is largely dollarized”.
The surge in dollar usage in Zimbabwe comes as China has made the internationalization of the yuan a top priority.
Countries including Russia, India and Saudi Arabia have sought to include non-dollar payments in their financial systems to reduce their dependence on the US.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

US Dollar Replaces Zimbabwe Dollar For A Second Time

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