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Zimbabwean tycoon pushes for prices in rand as bread costs soar

Zimbabwean businessman Strive Masiyiwa says the move to rand could introduce some price stability.

Zimbabwean businessman Strive Masiyiwa wants the country to start pricing its goods in rand instead of RTGS dollars, a move that could introduce some price stability, ZimLive website reported, citing a Facebook post.

The Southern African nation 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.

Masiyiwa, whose Econet is one of the biggest companies in Zimbabwe, was 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 is quoted as writing.

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.”

© 2019 Bloomberg L.P
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Thanks for this idea, Mr Masiyiwa. I will try this trick in good ‘ol SA:

Can I thus invoice out and earn my business’ income in say US-dollar, but prefer my business expenses to be paid in ZAR or even Zim-dollar?? Huh?

(Turning back the clock to 2000 in Zimbabwe, when govt-sponsored farm-invasions ensued…..wouldn’t it been easier at the time to instead assist farmers with subsidies to be more productive / to become bigger employers; to be more business-friendly / done away with 51% black ownership within mining industry / respect freedom of speech, etc…..then these type of desperate measures TODAY, where this tiny country grapple with economic issues…would not have been necessary in the first place?! What you’re trying to do now, is to try and grab the sinking ship by it’s flagstaff on the stern, before it slips under the waves.)

Thank you Zimbabwe for providing a perfect basket-case example for academics to be used in macro-economic studies/teachings the world over 😉 Appreciate the sacrifice!

End of comments.

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