President Robert Mugabe’s administration, is reportedly sittings on wads of a new Zimbabwe currency to be backed by a gold standard, which can be issued at a moment’s notice as a home grown panacea to manage a dwindling economy, The Telescope News, has been told.
The idea for the gold-backed currency was first discussed in private, between Mugabe and fallen Libyan leader Muammar Gaddafi, on the side-lines of the inauguration of South African leader Jacob Zuma, in Pretoria in 2009, according to senior government officials.
Gaddafi wanted a common gold currency for the whole African continent, while Mugabe had proposed that it was better for the African Union (AU) member states to introduce the gold standard money individually, before announcing one common currency at a later stage so as to throw international financial players into confusion.
Disclosures of the top secret, come at a time when finance minister, Patrick Chinamasa has been defending the country’s use of a multi-currency regime since 2008, as a tactical strategy to contain “the enemy” because he cannot “devalue his own currency”.
Harare officially uses a currency basket, which includes: The Botswana pula, the British pound, the euro, the South African rand and the US dollar as the citizenry monetary options, following the collapse of the Zimbabwe dollar due to mismanagement of the economy by Zanu PF. Early this year the RBZ added four new currencies, as legal tender namely: the Australian dollar, the Chinese yuan, the Indian rupee and the Japanese yen.
Dispite concerns that introduction of the new currency alone, without addressing the supply side of the economy, characterised by company closures, will fuel a new wave of inflation, Mugabe appears determined to rid the country of what his backers are calling “Western monetary imperialism”.
This reporter, wrote about Zanu PF’s threats to return the local dollar last year in a London based online publication, whose report brought to light Mugabe’s intention to railroad a new currency as early as June 2015.
Economic analysts yesterday said, the idea of introducing new money prematurely was detrimental to the health of the economy, which has somewhat stabilised owing to the use of the multi-currency regime.
They point out to growth and external competitiveness challenges, which Zanu PF’s economic blueprint ZimAsset fails to address, as indicated by the economy’s low trend growth and poor foreign direct investment levels, declining share in world exports, coupled by high current account deficits, and an external debt now topping US$8 billion.
An economic adviser to the central bank also said government does not have the adequate resources such as money, facilities and logistics to introduce a new currency in the middle of growing political tensions.
“The budget for the project in foreign currency terms is simply beyond the state’s resource capabilities,” she said.
The new printed currency, which is said to be warehoused at various high security locations in the capital, including Fidelity Printers and Refiners in Msasa comes in bank note denominations of $2; $5; $10; $20 ; $50 ; $100 and $200 according to Reserve Bank of Zimbabwe (RBZ), International banking sources. Fidelity Printers and Refiners, is a subsidiary of the central bank, and the largest security and commercial printing company in Zimbabwe, which also specializes in buying gold.