By Davison Vandira
Zimbabwe’s productive value chains have immensely benefited from monetary policy sovereignty brought about by introduction of the local currency which has also significantly increased industry capacity utilisation.
The autonomy function of the Zimbabwe monetary policy is sacrosanct for many economic reasons, chief among them, the ability to influence and control macroeconomic fundamentals, particularly productivity level, interests rates and price levels which are all key in determining the direction and rate of economic growth.
Zimbabwe is currently pursuing a middle income economy by the year 2030 and at this juncture, this economic journey cannot afford to relegate its monetary policy autonomy to other monetary jurisdictions as this will affect the country’s competitiveness within the region and globally.
The period between 2009 and 2017 was characterised by influx of cheap imports as the economy could not produce competitively because of a dollarised economy which meant Zimbabwe became the supplier of foreign currency to the region and beyond, consequently this came at a huge cost to local industries who folded operations as testified by increasing unemployment levels.
The introduction of the local currency reversed this situation and capacity utilisation and local production started to improve and the efficacy of this move is currently punctuated by high shelf occupancy by locally-produced goods as high as eighty percent.
The country’s freedom to influence its economic destiny can only be guaranteed by the continued use of the Zimbabwe dollar, especially when the nation is eyeing an export led economic growth.
Furthermore, the authorities’ ability to influence money supply and productivity have done well to configure the economy in the desired direction as spelt out in the National Development Strategy One.
The masterstroke benefit of the introduction of the Zimbabwe Dollar was to halt the soaring external debt incurred mostly during the dollarisation era, hence the continued use of the local currency is in the best interest of the economy and the nation at large.