Finance Minister Professor Mthuli Ncube, at an award receiving event for the Zimbabwe International Trade Fair (ZITF) in Bulawayo yesterday revealed his study that showed that the use of the United States Dollar (USD) as the anchor currency had reduced Zimbabwe’s competitiveness by half.
The Professor said the study managed to show that that by having a kind of a domestic unit of account the competitiveness could be boosted and that is what the government intends to achieve going forward.
“Competitiveness means that we must sharpen everything that is required to compete with the rest of the world,” Ncube said. “One of those is obviously the value of your currency.”
“So it is therefore not surprising that we decided to move to the interbank market system which really obviously resulted in us now using a new unit of account domestic, the RTGS Dollar that’s designed to boost copmetitiveness that we had lost through the use of the one to one exchange rate.”
Besides competitiveness, the Finance Minister also discussed on the role of Small and Medium Enterprises (SMEs) and said that the small businesses can also export.
“SMEs support is basically through what we call procurement systems where you make sure that SMEs are part of the ecosystem of larger companies and larger companies must make sure that SMEs procure from them,” Ncube said.
Such arrangements will make it easier for banks to lend SMEs which do projects for larger companies according to the Zimbabwean Minister.
Zimbabwe has witnessed a large migration of people to becoming SMEs as bigger companies closed down or relocated to other countries.
The Minister also revealled that competitiveness also goes with value addition.
“Value addition is very critical, it goes with beneficiation so that we are able to move all the way from mining lithium, processing it and eventually manufacturing lithium batteries here in Zimbabwe, that’s what it means,” Ncube explained.