Masiyiwa wants Zimbabwe to start pricing in rand instead of RTGS dollars
FOUNDER and Executive Chairman of Econet, Strive Masiyiwa, wants Zimbabwe to start pricing its goods in rand instead of RTGS dollars, a move that he says could introduce some price stability.
Masiyiwa, whose Econet is one of the biggest companies in Zimbabwe, said this while reacting to news that the price of bread almost doubled to RTGS$3.50 from $2 this week.
“The people who pay for a lot of goods are Zimbabweans living in South Africa, through their remittances. The cost structure – labor and goods – in Zimbabwe is distorted by the arbitrage of the United States dollar as a currency of settlement for rand imports,” Masiyiwa said on his social media page.
President Emmerson Mnangagwa’s government does not need to join the Rand Monetary Union to make the switch, Masiyiwa insists.
“Let me put the proverbial cat among the pigeons,” Masiyiwa said, writing on Facebook.
“A loaf of bread in South Africa costs R9.50. It costs R30 in Zimbabwe. 3x!!! Eighty percent of imported goods in Zimbabwe come from South Africa. It’s not uncommon to find those same goods costing anything above three times the cost.
“The people who pay for a lot of goods are Zimbabweans living in South Africa, through their remittances. The cost structure – labour and goods – in Zimbabwe is distorted by the arbitrage of the United States dollar as a currency of settlement for rand imports.”
Masiyiwa said if every business in Zimbabwe quoted goods and services in rand for their customers, “it would go some way to eliminating the dollar arbitrage”.
He said this was not the same thing as joining a rand monetary area, or customs union, which is a more complex process. This one can be done “overnight, and even voluntarily.”
Masiyiwa, who lives between South Africa and the United Kingdom, says over a million Zimbabweans living in South Africa can demand price parity in the rand. He predicts the switch to the rand as the main currency of trade would “improve the quality of life for our families and also improve general liquidity.”
Zimbabwe on February 22 introduced the new currency, which has since weakened about 18% versus the dollar.
The annual inflation rate has risen to its highest levels since a hyperinflation episode in 2008.