Since the demonetisation of the Zim-dollar in 2008, the business community and seniors figures have continuously lobbied the government to adopt South African rand.
The cash shortages faced by Zimbabwe forced many businesses to cease operation in the last few years. The majority of companies which rely on raw materials from abroad have been heavily hit by the ongoing crisis causing production to rapidly slowdown.
Although, the government is currently implementing reforms to rebuild the economy, even austerity measures to reduce expenditure, the business community is strongly in favour of adopting the rand. The Confederation of Zimbabwe (CZI) and Bankers Association of Zimbabwe are among the institutions pushing for the adoption, pro-rand supporters believe it could potentially resolve the currency-issue in the country.
During a protest last week to pressure the government into adopting the rand as its official currency and scrapping bond notes, Nelson Chamisa, the leader of the Movement for Democratic Change (MDC) said,
“Pending dialogue and discussion, we demand the following measures to be taken immediately: the immediate scrapping of the bond note, the immediate liberalization of the exchange rate.”
The general argument for adopting the rand has been that trade between the two countries will massively increase. A large percent of exports from Zimbabwe end up in South Africa and, the majority of imports are from South Africa. As a result, local businesses order their stock mainly in rand however, their customers pay in bond notes. Forcing the local businesses to turn to the black market to acquire real American dollars to restock.
The government is yet to decide whether it will continue with bond notes or opt for the South African rand. It is evident that the currency challenges in Zimbabwe continue to cripple its economy.