South African Rand Adoption Could Work for Zimbabwe Argues deVere Group
Zimbabwe should speed up the process of replacing the US dollar with the South African Rand, a move that could help the country lower domestic prices and increase international competitiveness.
2016 has seen an escalation of cash shortages in Zimbabwe – a country that is now almost exclusively a US dollar-based economy since the domestic unit was ditched in 2008.
Subsequent years have seen a move from a more diverse basket of currencies used in the country to a near total domination by the Greenback.
Whatever the composition of foreign currencies in use, a chronic lack of foreign investment remains the root cause of the cash shortage – a country that relies on foreign currency of course needs foreign capital flowing in.
The crisis ultimately requires a major policy about-turn from the government, however, shifting away from a reliance on the US dollar, to the South African rand, could well ease some of the pain and buy the government time to implement investor-friendly policies.
