CZI calls for adoption of SA rand

10_randHARARE The Confederation of Zimbabwe Industries (CZI) last week urged the government to adopt the South African rand as a currency of reference, saying continued use of a multi-currency system was confusing.

“The system of multiple currency is confusing,” CZI acting president Joseph Kanyekanye told reporters in Harare, adding; “CZI maintains that adopting the rand as a reference currency is still the route to go.

The government earlier this year ditched the worthless Zimbabwe dollar and introduced a basket of currencies including the United States dollar, South African rand, British Pound and Botswana pula as legal tender, a move that immediately halted hyperinflation that had ravaged and discredited the Zimdollar.

Although the unity government said it wanted the Zimbabwe dollar to be reintroduced once the economy was on a sustainable path to recovery and industrial capacity utilisation was above 60 percent, President Robert Mugabe and central bank governor Gideon Gono have fuelled speculation that the Zimdollar could be reintroduced earlier.

However, last week Gono ruled out the return of the Zimdollar joining his boss Finance Minister Tendai Biti who has long insisted that the local currency would only be restored once the economy stabilised.

“There have been several rumours doing the rounds in the market about the return of the Zimbabwe dollar, Kanyekanye said. It is good assurance to business that the multiple currency system will remain in the medium term.”

CZI considered the voice of business in the country also welcomed the reduction by Biti in his 2010 national budget statement on Wednesday of corporate tax from 30 percent to 25 percent, but said the reduction in personal tax failed to meet the business leaders expectations.

“We had expected a further reduction in personal tax to meet our expectations. We had expected a further reduction in order to increase disposable incomes in a drive to spur local demand,” the CZI chief said.

The industrial body also welcomed “the extension of the duty-free on basic commodities to the end of July, as well as the suspension of customs duties on selected inputs to make basic commodities”.

Kanyekanye said there was need for government to come up with a US$1 billion revolving fund so as to assist the recapitalisation of business.

“From the resources available to the minister we seem to have a situation where it would appear that there is isn’t enough resources to be able to provide short term and medium term working capital for businesses,” Kanyekanye said.

Post published in: Economy

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