Acting Finance Minister Patrick Chinamasa last week legalised the use
of the American dollar and several other foreign currencies as legal
tender alongside the Zimbabwe dollar as part of desperate measures to
try to pluck the once prosperous country out of crisis
Zimplats welcomed the move to dollarise the economy but warned that
government may in the end fail to raise enough foreign currency to fund
its activities and could eventually be forced to turn to the export
sector for hard cash.
"Whilst this (dollarisation) will be welcomed by most people in the
country particularly the working class, there are strong fears
regarding the government’s ability to raise hard currency to fund the
budget," Zimplats said in its quarterly report ending December 2008
released this week.
"Ultimately the government may be forced to implement unfavourable
policies on exporters to raise hard currency that in the end may make
it difficult to operate the business viably."
The firm also advised shareholders to continue "with extreme caution in
their share dealings due to the uncertain" political environment in
Zimplats, which is owned by South Africa’s Implats – the world's second
biggest platinum producer – also said that it posted a US$22 million
deficit as a result of falling world metal prices.
During the period under review, operating costs rose by 17 percent, the company said.
A collapsed currency coupled with hyperinflation is the most visible
sign of Zimbabwe's severe economic crisis that is also seen in
shortages of food and every essential commodity, deepening poverty and
a cholera epidemic that has killed more than 3 000 people since August.
A unity government between President Robert Mugabe and opposition
leaders Morgan Tsvangirai and Arthur Mutambara has raised hopes
Zimbabwe could begin to emerge from an economic crisis once described
by the World Bank as the worst in the world outside a war zone.
ZimOnlinePost published in: Agriculture